Banca Naţională a României

On 20 March 2020, the Board of the National Bank of Romania convened for an emergency meeting and adopted a package of measures aimed at mitigating the impact of the situation generated by the coronavirus outbreak on households and Romanian companies.

In the current domestic and international context and based on the information and analyses on the constantly evolving macroeconomic and financial developments, the NBR Board decided the following:

• to cut the monetary policy rate by 0.50 percentage points, from 2.5 percent to 2.0 percent starting 23 March 2020;
• to narrow the symmetrical corridor defined by interest rates on standing facilities around the monetary policy rate to ±0.5 percentage points from ±1.0 percentage points. Thus, starting 23 March 2020, the deposit facility rate stays at 1.50 percent, while the lending (Lombard) facility rate is lowered to 2.50 percent from 3.50 percent. Against this background, the main ROBOR rates are expected to witness a significant downward adjustment.
• to provide liquidity to credit institutions via repo transactions (repurchase transactions in government securities) with a view to ensuring the smooth functioning of money market and of other financial market segments;
• to purchase leu-denominated government securities on the secondary market with a view to consolidating structural liquidity in the banking system that should contribute to the smooth financing of real economy and the public sector.

Depending on how the situation evolves, the NBR Board stands ready to also proceed to cutting the minimum reserve requirement ratios on leu- and foreign currency-denominated liabilities of credit institutions.

In view of the elevated uncertainty surrounding economic and financial developments, the NBR Board also decided to suspend the previously announced calendar of monetary policy meetings and hold monetary policy meetings whenever necessary.

The NBR Board is closely monitoring the unfolding of the situation, its decisions being aimed at ensuring macroeconomic stability and the proper functioning of the banking system, of financial markets, to the benefit of households and Romanian companies.