Romania's National Bank (BNR), in its August 5 monetary policy meeting, cut the refinancing rate by 25bp from 1.75% to 1.50%.

This comes after BNR cut the policy rate by another 25bp at the end of May. No change in the minimum required reserve ratios was operated.

Given the liquidity shortfall on the money market, the BNR board decided to continue the repo transactions and purchases of RON-denominated government securities on the secondary market.

Financial market conditions continued to improve amid the new monetary policy decisions taken at end-May, the central bank commented.

The key interbank money market rates consolidated their decline, and yields on government securities extended their downward course, given the significant volume of liquidity provided by the BNR via bilateral repo operations and purchases of RON-denominated government securities on the secondary market.

BNR also says that the average lending rate for new business followed a clear-cut downtrend in 2020 Q2, while the average remuneration of new deposits fell only slightly, with the related spread narrowing considerably.

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editor@romania-insider.com