Lenders Took RON39B Loans From Romanian Ctrl Bk In Feb, Up 23% M-M

In January, loans taken by Romanian bank through BNR’s lending facility totaled RON31.5 billion.

The interest rate offered by the central bank for loans to commercial banks was of 14.05% in February.

The central bank offers lenders the short-term Lombard lending facility with an interest rate of the key monetary policy rate plus 4 percentage points. The banks can place their funds at the central bank for an interest rate of the key monetary policy rate minus 4 percentage points.

The key monetary policy rate was at 10.25% a year in January, but was reduced at 10% early February by BNR’s board.

Romanian lenders placed deposits worth RON2 billion, more than three-fold lower compared with RON6.6 billion in January.

On Tuesday, the central bank kept unchanged the key monetary policy rate at 10% on the year, but cut to zero from current 40% the minimum reserve ratio on foreign-denominated liabilities with residual maturities of over two years.

Romanian banks took in the fourth quarter of 2008 loans worth RON87.24 billion through the lending facility, as the international financial turmoil started to impact the local credit market.

In October, banks took a record sum of RON48.99 billion and deposed only RON2.13 billion. The lack of liquidity and demand for Romanian currency from foreign speculators led to increases of interest rates above 50% a year, nearly causing a deadlock on the monetary market.