ROBOR rates are now down by more than two percent compared with the beginning of the year. After Romania’s central bank resumed the monetary policy relaxation cycle, the money became cheaper on the money market.
The three adjustments of the key rate this year amount to one percent together, and the three-month ROBOR has dropped 1.3% between July and the end of September to about 3.3% a year. The six-month ROBOR dropped by 1% to 3.8%.
This cut in banks’ financing cost should translate in cheaper leu loans. However, cheaper loans in lei are yet to come. Bankers first rushed to pay less for deposits and put off cutting the interests on loans at the same rate, thus trying to maximize profit.
The cost of leu loans remains rather high, around 10%, and private lending has been flat at EUR50 billion equivalent in the last four years.
Romanians with loans in lei will not pay less soon, but in the coming months, as the new indicators used to calculate loan costs are adjusted in the loan contracts.
Central bank governor Mugur Isarescu has recently warned bankers that the leu interest rate cut was ‘insufficient’ and reflected neither the monetary policy nor the market conditions. He believes banks will have no other way but to make leu loans cheaper.
Banks are bound by contract to adjust the indicators used to calculate the interest rate as their financing cost changes. Such indicators are usually adjusted twice a year or every quarter, depending on the bank, analysts say.
(English version by Loredana Fratila-Cristescu)