BNR published on Friday the new value of IRCC, an index calculated as an alternative to ROBOR. From 4.06% it rose to 5.99%. In Romania, about 460,000 people have loans secured by IRCC.

National Bank of Romania – BNRPhoto: Hotnews

IRCC stands for Consumer Credit Benchmark Index.

How IRCC is calculated

The index is calculated daily and quarterly. The daily IRCC is calculated by the National Bank of Ukraine and is a weighted average (with the volume of transactions) of the interest rates of transactions on the interbank money market.

The quarterly IRCC calculation is set as the arithmetic average of the daily IRCC values ​​reported for the previous quarter (all working days in the quarter are taken into account) for use by banks in the following quarter.

What decisions do Romanians have regarding IRCC-reported loans?

Experts recommend that people refinance loans now and choose a fixed rate. By refinancing, borrowers can freeze interest rates on their chosen fixed rate for 3-5-8-10 years or more, avoiding their rates from increasing further in the future.

“The main option available to Romanians with loans notified to the IRCC is a simple and affordable one, through which they can protect themselves from the consequences of an increase in the index, namely by refinancing into a fixed interest loan. A fixed rate provides the borrower with a safe and stable structure, protecting them from future IRCC fluctuations and keeping their rate at the same level throughout the fixed rate period. I still recommend a fixed rate refinance, at least for 3 years, because IRCC doesn’t seem to decrease even from April 1, 2023, and will remain around 6%, and we can’t yet predict the rate of decrease, whether it will be accelerated or slow . The main advantage is that borrowers gain time and security, because during the period of fixed interest the banking market will stabilize, IRCC will decrease and the variable interest rate will decrease,” explains Valentin Angel, CEO and founder of AVBS Credit.

That way, those affected by the IRCC increase can lower their loan rates and then temporarily “freeze” them by refinancing at a fixed interest rate.