Effective rate up, nominal rate down
Ziarul Financiar
28.09.2007
The effective interest rate used by the central bank in market operations had not acted as the monetary policy rate over the last few months, therefore the nominal rate was able to remain unchanged even though the effective rate increased, and the NBR does not run the risk of appearing too concerned over the inflationary pressures cumulated over the last period.
"The relevance of the monetary policy rate as a reference rate has disappeared due to the inconsistency of the NBR and the Ministry of Economy and Finance, which have undoubtedly set the tone for the market. Thi ngs change from one day to the next. The NBR should keep the interest rate at the same level as the monetary policy rate, but in fact there were major fluctuations from one week to another, far below the reference rate. If the Ministry of Finance gets upset, it might abruptly stop taking money from the market, because it doesn't like the price," says Misu Negritoiu (photo), general manager of ING Bank Romania.
Analysts say what the NBR did on Wednesday was merely confirm Monday's full purging move, by returning to "firm liquidity control", as compared with the "adequate control" of the previous months, which in fact meant absorbing liquidity at variable interest rates, most of the time below the monetary policy rate.