Update – BNR increases monetary policy rate to 2pc. Governor Isarescu: This does not mean ROBOR Index will grow further

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In its meeting of Monday January 8, 2018, the Board of the National Bank of Romania (BNR) has decided to increase the monetary policy rate to 2.00 percent per annum, up from 1.75 percent per annum as of 9 January 2018, a BNR release posted on its website reads.

The Board has also decided to raise the deposit facility rate to 1.00 percent per annum from 0.75 percent per annum and the lending facility rate to 3.00 percent per annum from 2.75 percent per annum as of 9 January 2018. Another decision concerns to maintain the existing levels of minimum reserve requirement ratios on both RON- and foreign currency-denominated liabilities of credit institutions, the release concludes.

The monetary policy rate had the level of 2% during April 1-May 7, 2015. Since then, the level was of 1.75% per annum until today, January 8, 2018.

In its meeting of September 30, 2014, the Board of the Romania’s central bank decided to lower the monetary policy rate to 3.0 percent per annum from 3.25 percent starting with October 1, 2014 and to pursue adequate liquidity management in the banking system.

BNR Governor Isarescu: The impact on ROBOR Index is minor

In a press conference Monday afternoon, BNR Governor Mugur Isarescu said the messages from the market are read very carefully.

“But the reality is as follows: the interests you are interested in, the 3-month and 6-month ROBOR indices, have fallen almost constantly during the past weeks. Today is has reached 2% for 3-month, on the background of a temporary liquidity excess. This increase does not necessarily mean the ROBOR will grow further,” Mugur Isarescu said.

Isarescu added that the effect on the market might be slightly different. We don’t envisage large movements in terms of interests. My duty is to send this message and to underline that the ROBOR Index movement, which would probably be felt, could go down below 2% for 3 months; it depends on the market conditions. The impact of the monetary policy rate is minor, consequently, excessive mediatisation should be pondered,” the BNR Governor said.


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