Romania’s interbank market slipped back into a liquidity deficit in October, averaging over 1.7 billion lei a day, as the National Bank of Romania (BNR) moved to become a net lender to banks. The shift ended more than a year of surplus conditions, and it came as the leu weakened amid a prolonged domestic political crisis.
Central bank steps in
BNR intervened to temper the leu’s depreciation, and banks borrowed 6.7 billion lei a day on average through bilateral repo operations in October. The central bank was, in effect, the lender of last resort for the banking system.
At the same time, banks with excess liquidity parked 5 billion lei a day in BNR’s deposit facility. That amount was well below the roughly 20 billion lei deposited in previous months.
Signs of strain since September
Liquidity had been deteriorating since September, when interbank liquidity fell to a one-year low. The leu repeatedly hit historic lows during the autumn, passing 5.3 lei per euro.
Interbank ROBOR rates rose above 6 percent during the period, a sign of tighter funding conditions across the market.
