NBR halts publication of ROBID/ROBOR

NBR decided it can shut down publication of ROBID/ROBOR, if ROBOR increases by 25% the interests for the debt instrument, in an effort to protect borrowers with credits indexed at ROBOR by the unjustified interest growths.

NBR board decided, after a meeting with representatives of several commercial banks that “if ROBOR exceeds 25% the interest for credit facility, the central bank has the authority to suspend publication of ROBID/ROBOR indices calculated based on the participant banks”, reads the press release remitted by National Bank of Romania (BNR).

At this point, the annual interest for loans is 14.25%, therefore, National Bank of Romania can decide to halt publication of quotations for ROBID/ROBOR if ROBOR exceeds 17,8125%.

“In this case, National Bank of Romania will make public indices of ROBID/ROBOR calculated as follows: ROBID on all maturities, at the level of interest rate for the deposit facility of the central bank; ROBOR on all maturities at the level of interest rate for credit facility of the central bank,” reads the press release issued by NBR.

“I believe the regulation was modified, mainly for the end-user, the individual who contracts loan from the bank and who is this way, safeguarded by the situations in the market”, according to a dealer. On the other hand, the measure was designed to limit speculations in the monetary market, as the interbank interests exceeded 100%, adding that the imposed threshold is “too drastic”.

“I believe that at this point, the quotations are compelled, if they exceed more than 10-15% the interest rate for credit facility, namely over 25-30%”, same dealer added.

Furthermore, Florin Bota, dealer of Banca Transilvania said the top threshold proposed by NBR is “reasonable, as in the past few months transactions were made at 15-20%”.

“I was expecting a restriction. The decision comes to regulate the extremes”, Bota added.

Credit facility, also known as Lombard is the granting of credit by banks against pledged items via National Bank of Romania at an interest 4% higher than benchmark lending rate.

Interest for drawn deposits (ROBID) and for placed deposits (ROBOR) are calculated on day-by-day basis, taking into account the quotations displayed by 10 commercial banks.

NBR called seven banks for talks on the status of interbank lending interest rates

National Bank of Romania called for talks the leaders of seven banks, demanding explanations on the excessively high level of interbank interests in the past few days and demanded them to get on their normal parameters, the central bank announced on the press release.

“In the context of recent evolutions of the monetary and currency markets, the Supervisory Division of National Bank of Romania called for talks the leaders and treasury directors of seven commercial banks. They were demanded for explanations on the interbank markets operations, as well as excessive quotations of interest rates,” the central bank announced.

Meanwhile, “leader and treasury director of another bank were invited to give reasons for the clearing operations that the bank conducted with non-resident financial institutions, as well as on the positions remained open within the operations carried out in the interbank market,” reads the press release.

National Bank of Romania has demanded the banks to get in to the normal parameters and was keen on mentioning that recent evolution of ROBID/ROBOR “is a temporary and isolated situation”.

Translated by Camelia Oancea