Isarescu tries to calm the stormy financial market waters

A veritable quake on the Romanian financial market: interest rates on the SWAP market soared 500 percent, while the Bucharest Stock Exchange (BNR) regained 15 percent of lost ground. Analysts attribute this to a need for liquidity.

BNR Governor Mugur Isarescu intervened to calm the storm. "There is no liquidity crisis, there was a failed attack on the leu, now followed by an attempt to cover up these losses," according to yesterday's explanation by Isarescu of the 500 percent rise in SWAP market interest rates and pressures on the exchange rate.

Nicolae Cinteza, Director of BNR's Supervisory Department, warned that only three in ten banks, whose quotations are used to calculate the ROBOR reference rate, are keeping this figure high, between 85 and 99 percent.

Positions taken on Friday by speculators remained open even yesterday, which BNR's Governor qualified as inadmissible.

Mugur Isarescu warned that he will sanction bankers who are wrongfully administering banking operations, because BNR is making available liquidity at an annual 14.25 percent interest.

"Some major treasuries did not know how to access the Lombard rate or said they were embarrassed. (...) This is a gross lie, clearly ill-will," added Isarescu.

Business Standard