BNR’s Governor Isarescu: Three-month ROBOR to follow today’s augmentation, credits due to marginally go up, consequently

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The three-month ROBOR Romanian Interbank Offer Rate, the one influencing the interest rate of loans granted in lei will follow, within a certain period of time the augmentation of Wednesday’s key interest and loans in lei will consequently become more expensive, National Bank of Romania (BNR)’s Governor Mugur Isarescu told a press conference.

“I believe the three-month ROBOR, the one that influences the interest rates of loans granted in lei, will follow, within a certain period of time today’s increase and the loans in lei will consequently become more expensive, let’s say marginally. Why am I saying marginally? Because the increases are not sizeable and if we think of the historic level the interest rates of loans in lei a few years back, it stood at 5-6 percent, we know where we started from, the movement or the increase is marginal. We also need to take into account the inflation rate. The measure taken today practically intends to strangle, to use a rather strong word, but this rather is our purpose,” Mugur Isarescu said.

He affirmed that inflation is presently determined to a large extent by some prices being managed and the price of crude oil and the augmentation of the interest rate is intended so that this rise of prices not transfer to the public’s, the population’s and the firms’ anticipations, because in such eventuality, loan interest rates would surge.

Moreover, he mentioned that liquidity movement in the previous year’s last quarter and the beginning of this year are mostly determined by the Finance Ministry’s operations.

The Board of the National Bank of Romania decided on Wednesday the augmentation of the interest rate of the monetary policy to 2.25 percent per year, from 2 percent, as of 8 February 2018.

Furthermore, the institution decided the increase of the interest rate for the deposit facility to 1.25 percent per year from 1 percent, and the interest rate associated to the credit facility to 3.25 percent from 3 percent per year.