Loading ...Ghetea’s statement comes after the decision by the National Bank of Romania’s Administration Board to reduce its monetary policy rate from 7.5 percent to seven percent annually, starting with February 4. ‘In the immediate future, banks will cut interest rates both on loans and on deposits,’ Ghetea told a TV station on Wednesday.
He explained that a deposit interest rate cut is threatening as ‘clients will no longer bring their cash to the banks, and other problems are likely to appear, such as liquidity shortage, which will subsequently lead to rising loan prices.’
Related to the credit market situation, the ARB chairman added that ‘demand’ is virtually inexistent in the retail field, and most of the corporate loan applicants could not bring evidence to support the viability of their business, not having sufficient guarantees.
‘Risks are high, so that applications such as these are placed under the non-bankable label,’ Ghetea underscored. The National Bank of Romania’s Administration Board decided on February 3, to cut its monetary policy rate from 7.5 percent to seven percent per annum, starting with February 4. It is the second time this year that National Bank of Romania has reduced its monetary policy rate and analysts believe the decision has been made as a result of the disinflation process on good performance and in order to stimulate lending.
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