In case communication problems appear between the banks, Romania’s central bank (BNR) is available to mediate discussions between the players with liquidities in excess and those in need to attract funds, stated Eugen Dijmarescu, BNR vice-governor, who is attending the Euromoney conference on South-East Europe in Thessaloniki. At the same time, he said that the high interest rates level is not to last.
“I am confident that the high interest rates level is just a temporary issue. At the end of this month we are to convene the BNR Administration Council and this subject is included on its agenda.
If real situation appear till then, we will discuss with the banks in question on individual basis”, said Dijmarescu.
If real situation appear till then, we will discuss with the banks in question on individual basis”, said Dijmarescu.
Vice-governor stressed that BNR is open to aid the banks to better grasp their assumed positions, and to observe the minim mandatory reserve level, as well as their swap transactions.
Likewise, he said that in case a “real” need for liquidities will be triggered at the scale of the entire banking system, BNR might reduce the level of the mandatory minimum reserve. At present, BNR obliges the banks to block 20% of the attracted funds in lei and 40% in foreign currency.
Likewise, he said that in case a “real” need for liquidities will be triggered at the scale of the entire banking system, BNR might reduce the level of the mandatory minimum reserve. At present, BNR obliges the banks to block 20% of the attracted funds in lei and 40% in foreign currency.
“We cannot know how long this turmoil will last. But it is very important for each bank to acquire state securities and make a reserve”, warned the vice-governor, admitting that some of the players fail to have such instruments in their portfolios and in case they are in need of liquidities they have to appeal to mediating banks in order to access BNR offered facilities.
On the other hand, Dijmarescu remarked that, if a tendency of loan granting slowdown appeared lately on the background of the lack of liquidity worldwide, one has yet to talk about a loan volume decline. As well, more expensive credits are expected in the period to come, but BNR official did not offer some other details.
In the last week, lei interest rates on the monetary market ranged between 30 and 120% due to the lei crisis produced by a speculative attack upon leu/euro exchange rate by foreign players, Ziarul financiar daily reports.
In the last week, lei interest rates on the monetary market ranged between 30 and 120% due to the lei crisis produced by a speculative attack upon leu/euro exchange rate by foreign players, Ziarul financiar daily reports.
Analysts expect a significant slowdown in retail loans starting this autumn, concurrently with the implementation of some new BNR regulations which impose to the banks a more stringent client selection policy, overlapped by a financing costs increase. In 2007, retail loans climbed by some 80%, but the pace has visibly slowed down due to the fundamental effect and some debt outsourcing by the local banks.
In connection with the local currency depreciation, BNR vice-governor pointed out that, despite inflationary, this has led through demand contraction effects to a strong slowdown in current account deficit rise.
“We estimate that the current account deficit will be at the end of this year below 14% of the GDP”, stressed Dijmarescu. The central bank official also said that estimations indicate a lower inflation in the period to come, also sustained by a good agricultural output.
“We estimate that the current account deficit will be at the end of this year below 14% of the GDP”, stressed Dijmarescu. The central bank official also said that estimations indicate a lower inflation in the period to come, also sustained by a good agricultural output.
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