Private lending brakes abruptly and deposits start falling in July

Individuals and companies borrowed much less in July, the first month Goverment's austerity measures were enforced, so that the volume of private lending registered a steep decline, by four billion RON, to 206.7bn RON (the equivalent of 48.7bn euros).
The decline was largely caused by the exchange rate impact, given that the RON in July rose by almost 2.8% against the euro, triggering an artificial decline of foreign currency-denominated loans when reported in RON.
RON lending posted a slight increase of 0.2% last month, to 78.6bn RON, owing to corporate borrowing, according to NBR data. However, the increase is way below July inflation of 2.4%.
Meanwhile, the volume of foreign currency loans dropped by 3.2% in RON, to 128.1bn RON (30.2bn euros). Denominated in euros, foreign currency lending slid by 0.4%.
Bankers say many clients have become cautious about borrowing amid Government's austerity moves, so that loan demand remains weak.
At the same time, both the individuals and companies in July spent money from deposits opened with banks, so that their total amount dropped by 1.3% against June. RON deposits fell by 0.7%, to 104.8bn RON, while foreign currency savings, denominated in euro, slightly increased by 0.5%, to 14.9bn euros (63.1bn RON).