BNR lends over RON 6 bln to banksUpdated: 27-01-2010 | Financial and Banking

The National Bank of Romania (BNR) conducted yesterday a repo-type operation in which it injected RON 6.066 bln into the interbank market, at an interest of 7.5 pc, equal to the monetary policy rate, Mediafax reports. The sum was borrowed by nine credit institutions and will mature in a week, on February 1st. Commercial banks yesterday announced interest rates of 7.45 - 7.95 pc for one-day deposits, more than twice the 3.17 - 3.67 pc they had announced Friday. Interest rates to one-week deposits remained unchanged at 7.7 - 8.2 pc.

"This is the first day of the reserve period, and interests significantly rose from Friday's values. However, the market does not urgently need cash, and the Central Bank's goal is to target the RON/EUR parity, because it considers RON as overvalued," a dealer explained. Furthermore, banks have higher cash demands these days, because the period when they must set up their mandatory cash reserves has just begun.

BNR conducted its previous repo operation on December 29, 2009 when it lent RON 9.472 bln to central banks, at an annual interest of 8 pc, equal to the monetary policy rate of that time. In repo (repurchasing) operations, BNR offers cash to commercial banks, against state bonds.

RON continues to appreciate

The European single currency slightly devaluated Sunday against the Romanian currency, as BNR announced a reference exchange rate of 4.1252 RON against an EUR, down 1.30 Ban (0.31 pc) from Friday's value of 4.1382 RON/EUR. The US Dollar too lost ground to the RON, with BNR announcing a reference exchange rate of 2.9079 RON/USD, down 1.76 Ban (0.6 pc) from the rate of 2.9255 RON/USD established during the previous trading session. Bullion was quoted Monday at 103.1615 RON for 1 gram of gold, up 13.54 Ban (0.13 pc) from Friday's level.

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