Central Bank Governor Tells Senators How ROBOR Index Works

Asked whether the rate was manipulated, Isarescu said no and went on to explain the rate is established among banks and it is not a cartel-type agreement.

The money market rate may oscillate only between 1.5% and 3.5% because the benchmark interest rate is set at 2.5% and the symmetrical corridor around the key rate is of one percentage point, Isarescu told senators.

“If the rate goes higher or lower, excess liquidity is drained,” he added.

Isarescu also reminded that he has said before the time of low interests has passed.

Romania’s ruling coalition has repeatedly attacked the central bank recently, accusing it of raising interbank rates artificially. In late December last year, the government introduced a tax on bank assets conditional on interbank interest rates, a move that hinders the effectiveness of the central bank’s monetary policy decisions.