Romania’s National Bank (BNR) board decided yesterday to keep the monetary policy rate at 1.75% per year and took several other decisions aimed at curbing the recent increase in interbank interest rates.

The monetary policy rate was last diminished in May 2015 by 0.25 points, from 2% to 1.75%, a historical minimum.

Banks with excess liquidity will get a 0.5% interest per year for deposits kept at BNR from October 4 (today). For financing through the credit facility (Lombard credit), banks will pay the central bank an interest rate of 3% per year.

BNR has lent RON 9.3 billion (EUR 2 billion) to commercial banks, through a 7-day repo-type money market operation, reports local Profit.ro. The move is expected to bring short-term interest rates below 1.75%. The central bank thus aims to improve liquidity conditions in the market and to lower short-term rates.

The 3-month ROBOR level (ROBOR 3M), which most banks use in their lending contracts, reached 1.8% on Tuesday, October 3, double the level registered at the beginning of September. It was the highest level since November 2014.

The Government recently criticized BNR for allowing interbank interest rates to increase at a fast pace, which may result in higher monthly payments for bank clients with loans in local currency.

editor@romania-insider.com