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BNR will keep key interest at 10.25% /year

The majority of the analysts count on keeping the interest of monetary policy at 10.25% per year and the drop in the compulsory minimum reserves for passives in lei after the BNR session of 6 January, measures which could not free the market in the case of tradings on a long term between banks.

"In January, we rely on keeping the interest of monetary policy and cutting down compulsory minimum reserves which could help in the case of short-term interests. In order to drop the long term ones, we need a monetary policy more firm, with clear messages which could give trust back to the players" Nicolae Alexandru Chidesciuc said. Ionut Dumitru, head economist at Raiffeisen Bank Romania considers that in the session of January 6 2009, the National Bank of Romania will decide to keep the interest of monetary policy at the present level, 10.25%/year, but it could drop the level of compulsory minimum reserves for passives in lei, from 18 to 16%. "If they don't take this measure in January, they will take next session, but I think that the measure will be functional starting February. Anyway, the drop in compulsory minimum reserves will not solve the problem of trades on long term on the interbanking market" he explained. On the other hand, Dumitru draws the attention that the reduction of financing for the banks in Romania from their parent-banks would determine a diminution of the calculation basis for the compulsory minimum reserves in passives in hard currency, meaning a drop in the sums constituted as RMO part of the hard currency reserve.

"BNR should find a solution in the case of the reduction of RMO in hard currency, as the diminution of the external financing through parent-companies is taking place", the Raiffeisen head economist said. The drop in external financing started to be noticed these last months of 2008, under the conditions where a part of the debts due to parent=companies were not renewed. Dumitru expects a reduction of the interest of monetary policy by a quarter of a percentage point, over the first part of the year. Nicolae Alexandru Chidesciuc of ING Bank Romania considers that the reduction of the key interest "would not have an psychological effect under the present conditions" and the central bank should take measures to support interbanking operations, such as injections of liquidity on a long term, for an interest equal to that of monetary policy.

"The reduction of the interest of monetary policy has no effect unless it is obvious in the operations. If there are effects they will be limited. Liquidity must be introduced on the market and the operational framework must be changed, the interest to place liquidity at should be 10.25% not the one paid in Lombard. You cannot give long term loans with the money you take through the facility of loan" Chidesciuc showed.

In the case of the lombard loan, which is the loan facility offered by the BNR overnight, the banks got credit, at present, at an interest of 14.25%/year, guaranteeing with bonds. On the other hand, Lucian Anghel, the head-economist of the BCR considers that the central bank's decisions regarding the key interest and the minimum compulsory reserves will depend mainly "on the signal of collaboration BNR receives from the government". "If BNR believes in the government's plan to reduce expenditure, we could see a first signal on the part of the central bank, through the reduction of the key interest" Anghel said. He considers that minimum compulsory reserves will be reduced « not in January", such a decision being postponed for the next session of monetary policy.

BNR increased the monetary policy interest from 7% to 10.25%/year since the end of October 2007 up to the end of July 2008. During the last two sessions of 2008, the central bank kept the key interest but on October 30th they decided to lower the level of minimum compulsory reserves for passives in lei by 2 percentage points up to 18% starting with 24 November - 23 December 2008 to increase the level of liquidity on the market.

 

Sursa: http://www.actmedia.eu

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