Loan sales on the retail segment will remain weak this yearbecause people are still reluctant to take out loans, and banks canno longer encourage the market via interest rate cuts, because theyare already "very low", says Dominic Bruynseels, CEO of BCR, thelargest bank on the Romanian market. "At 6% a year (the NBR's keyinterest rate on RON-denominated loans), the interest rate is verylow and not much more can be done. Competition will lead to furtherinterest rate cuts on the market, but it is no longer as tough asit used to be in the past years. There is no loan demand any more,either, people fear unemployment and income decline," saidBruynseels at a meeting with the press. In fact, in the firstquarter of 2010, the BCR's volume of retail loans remained on adecline, which exceeded the slight rises on the corporate segmentand on the segment of funding for the local authorities.
Bruynseels believes central banks no longer have many leversavailable to relax the monetary policy - neither the NBR, nor theEuropean Central Bank do - the latter cut its euro interest rate to1% per year as early as in 2008, so the economic recovery shouldcome from companies.
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