Isarescu: Interbank Rates Grew Suddenly on Better Than Expected Tax Collection

“Improved performance in tax collection had some contribution to the ROBOR hike,” Isarescu explained.

Isarescu said the effects of today's decisions will be visible tomorrow. The three-month ROBOR rate, the average interbank lending interest rate used to determine interest rates for several types of loans in lei, reached 1.8% Tuesday after accelerated growth over the past days. The rate had not exceeded 1% since October 2015.

“There were several factors that overlapped accidentally, but I have said before that interests rates will grow inevitably. Such sudden changes will be avoided, as the central bank will inject liquidity into the market,” Isarescu explained, adding interests will circle around 1.75%”.

Last week, the prime minister criticized the central bank for failing to curb a rise in interbank interest rates and the finance minister had a meeting with central bank executive directors on Tuesday.

Romania's central bank board on Tuesday decided to leave the key interest rate unchanged at a record low of 1.7% but narrowed the standing facilities corridor to +/-1.25 percentage points from +/- 1.5 points around the key rate.

Starting October 4, the central bank will be raising its interest for deposit facilities to 0.5% a year and lowering the lending facility interest (the Lombard rate) to 3%.

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