The interbank interest rate ROBOR, the main benchmark for the cost of loans in lei, dropped on January 6 to a historic low of 0.98% per year (ROBOR for 3 months).

The level thus went under the psychological threshold of 1% per year for the first time.

The ROBOR (Romanian Interbank Offer Rate) is the average interest rate for RON-denominated loans in the interbank market. The banks usually set their lending costs based on this indicator, to which they add a margin.

The drop in the ROBOR is related to the low inflation level and the high market liquidity. The inflation has also reached a minimum level after 1990. The cost of loans in lei should reflect the ROBOR decline.

At the end of November last year, the average interest rate for new loans in lei granted to the population reached 6.6% per year, among the lowest in recent years.

The ROBOR level will remain around 1% if the Central Bank maintains the same key rate in 2016, according to analysts. BNR will decide today if it keeps the key rate at 1.75% per year.

editor@romania-insider.com