Central bank asks for cheaper loans but bankers say, “Be patient”

The National Bank of Romania (NBR) has cut its reference interest rate again, but its level remains equal to that set when the economy was booming. The NBR has cut its key interest rate for the fifth consecutive time by half a percentage point, to 8% a year, but bankers continue to ask for patience when it comes to making loans in RON cheaper. Loans granted to the private sector were on an uninterrupted slide in the first seven months of the year, then recording a slight rise in August, but only because of the high demand for funding in foreign currency. Amid interest rates of 10-13% a year on mortgage loans and of 15-18% a year for the acquisition of durable goods, loans in RON remain much more expensive than those in euros. They compare with interest rates of 6-8% a year on euro-denominated mortgage loans, and of 9-13% a year on consumer loans. "Loans in foreign currency will continue to be more attractive for clients if the RON/euro exchange rate remains stable. One should keep in mind that the difference between Romania's monetary policy interest rate and that of the euro zone still amounts to seven percentage points. Achieving convergence of interest rates will be a lengthy process, which could be completed in the year before the adoption of the euro," says Sergiu Oprescu, chief executive of Alpha Bank.