How is ROBOR/IRCC calculated?
First of all, it's good to know that since 2 May 2019, for variable interest loans in RON offered to individuals, the ROBOR index has been replaced by a new index, namely the IRCC (reference index for consumer loans), according to GEO 19 / 2019 🙂
IRCC is calculated as the weighted average of interest rates and market trading volumes.a interbank and is updated on a quarterly basis, similar to the way ROBOR6M is updated 😉
It is published every working day on the website of the National Bank of Romania.
Well, if we refer to ROBORthis is an index that is calculated by a not very complex formula, clearly established, monitored by the National Bank of Romania (BNR) and calculated with the help of the financial information company Thomson Reuters (a company that exists since 1851 and that also calculates the reference interest rate EURIBOR used worldwide).
Specifically, ROBOR is calculated daily as arithmetic average of interest rate quotes for RON, used by ten major Romanian banks, being the interest rate at which a bank lends liquidity to other banks. 😉
The extremes (highest and lowest interest rate) are excluded from the calculation to make the index as relevant as possible.
Thus, we can say about ROBOR that it is a price of money in terms of interest - a kind of benchmark - i.e. a benchmark of the cost of money for a local currency.
Yes, we know, it may sound a bit complicated. 😅
But it is important to know that ROBOR is determined very transparently, it represents a price of money and a benchmark for the evolution of interest rates in the banking market, being calculated and published both on the Thomson Reuters platform and on the NBR website, in a way clearly established and monitored by local / international financial institutions, by the authorities. The ROBOR is also announced by the NBR on a daily basis. 🙂