NBR’s decision mostly irrelevant unless you are a bank or the Government

I admit NBR surprised me today. I did not think it had the balls but most of it I thought it cared more about the real economy than about the political shenanigans. The only immediate effect of today’s decision is an instant 25bp profit for local banks financing the Romanian government debt. Of course, there is hope from the NBR that such a favor will be returned and local banks will continue to fund the increasing local debt at a lower rate. As this all happens at very short maturities the effect for all of us is that we will have to pay for it through higher taxes in the future.