“We are ready to close the gap between the interest rates in the market and the monetary policy rate, because lenders need a greater stability of the rates,” Isarescu said at the presentation of the central bank’s quarterly inflation report.
He said the central bank has allowed a certain gap between the monetary policy and the interbank rates during the past years due to the individual characteristic of the Romanian market, which is not “very deep” and which experiences rather sizeable capital inflows that could have caused the leu’s exchange rate to fluctuate 10% to 15%.
“Because of the high inflation rate [during the past years], Romania has lagged behind in terms of capital market developments,” Isarescu told reporters.
Romania’s interbank rates are well below the monetary policy rate, even after the central bank has cut its key rate to a record low of 3.25%. Wednesday morning, the overnight rates were at 0.7%-1.2% a year, while the weekly rates at 0.8%-1.3%.
The interest rates on annual deposits stood at 1.8%-2.6%.