Today’s repo was capped at RON5 billion, lower than the RON6 billion ceiling imposed last week. The central bank bought treasuries from 15 lenders and will sell them back August 20. The commercial banks planned to sell RON18 billion worth of treasuries at today’s auction.
Last week, the central bank bought treasuries from 10 commercial lenders through a one-week repurchase agreement operation, at an interest rate of 5.25% a year, equal to the monetary policy rate. The lenders had offered treasuries worth RON15.15 billion.
Market participants said the central bank’s decision to limit repo lending has helped strengthen the leu after interbank rates increased slightly.
Additionally, the central bank stepped up its interventions in the market and sold more euros to support the leu, which recovered from an historic low of 4.6481 versus euro set on August 3.
Monday, the leu’s exchange rate firmed to 4.5307 per euro, the strongest rate in one month.
In the money market, weekly rates were at 5.3%-5.8% a year, modestly up on the day.