Bankers are sitting on a mountain of cash that they prefer to keep in the treasury of the National Bank at an interest rate of 3% a year because, according to them, they have no one to grant loans to despite the interest rate cuts.
Because they were left with unused money, in March they set up very short term deposits worth 39.5 billion RON (8.75 billion euros), up 63% against the previous month and three times more than in the similar period of last year. The interest rate offered to banks in March was 3% a year, with the exception of the last two days of the month, when it fell to 2.5% a year.
In the same period, the central bank did not grant any short-term credit facility and organised one single repo auction, with banks borrowing 627 million RON over one week. In fact, banks did not resort at all to the credit facility offered by the NBR, which indicates that liquidity problems have disappeared.
The National Bank thus runs the risk of becoming a net debtor to the banking system once again, which would diminish effectiveness of monetary policy decisions.
Bankers are sitting on a mountain of cash that they prefer to keep in the treasury of the National Bank at an interest rate of 3% a year because, according to them, they have no one to grant loans to despite the interest rate cuts.
Because they were left with unused money, in March they set up very short term deposits worth 39.5 billion RON (8.75 billion euros), up 63% against the previous month and three times more than in the similar period of last year. The interest rate offered to banks in March was 3% a year, with the exception of the last two days of the month, when it fell to 2.5% a year.
In the same period, the central bank did not grant any short-term credit facility and organised one single repo auction, with banks borrowing 627 million RON over one week. In fact, bank