Romania’s National Bank (BNR) pumped some RON 16.65 billion (EUR 3.57 billion) into the local banking market on Monday, October 29, through a repo operation for a period of 7 days, at an interest rate equal to the monetary policy rate of 2.5% per year, local Digi24 reported.

Repo operations are short-term liquidity boosts the central bank offers to local banks that own government bonds. The central bank buys the securities and the banks agree to buy them back at a specified date and a price agreed beforehand.

The central bank uses such operations to lower interest rates on the interbank market when they go up.

BNR organized another such operation worth RON 9.7 billion at the beginning of October, and three in September, totaling RON 16.9 billion.

The interbank offer rate (ROBOR) for three months went down from 3.38% per year on Friday to 3.34% on Monday. The ROBOR is the reference for interest rates charged by local banks for the loans they grant to their clients.

editor@romania-insider.com