NBR not happy with rate cuts
Autor:
Razvan Voican
10.05.2005
Popa says the central bank needed to narrow the gap quickly between rates in Romania and those in the West while maintaining a balance between the decline in interest rates and the appreciation of the ROL in order to discourage large inflows of capital after the deregulation of non-resident access to deposits in ROL. The NBR pressure for rate cuts has made banks push rates on deposits lower, even below the level of inflation, delaying the change in the direction of investment from deposits with the central bank to loans.
The NBR vide-governor says the central bank did not witness any speculative capital inflows after the formal date of deregulation, April 11. "The market remained very calm, there were no visible moves, which also came as a result of the falling interest rate and the stability of the exchange rate." he said, adding that it would be difficult to know what would happen next. razvan.voican@zf.ro