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Rekkers: NBR has to cut the rate by at least 0.5% on June 30

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11.06.2009, 17:19 6

I expect the NBR to cut the key interest rate on RON by at least half a percentage point at the end of this month, because interests on loans in RON need to follow a significant downward curve so that small and medium-sized companies could make it through this period, says Robert Rekkers, chief executive of Banca Transilvania (BT), one of the top players on the market. "I understand very well that the NBR cannot decide sudden significant interest cuts, but the trend started has to go faster so as to give the market more powerful signals, especially since the inflation is under control and the central bank has this way a window of opportunity to proactively support the economy during the current negative context," Rekkers told ZF in an interview. The Board of Directors has its next monetary policy meeting scheduled for June 30, with the rate currently standing at 9.5%, 0.75% less than the level in effect at the beginning of the year. Erste Group, the majority shareholder of BCR anticipates that NBR’s rate will go down to 8.75% until September, an estimate shared by ING, whose analysts think the moves will take place by August.

BT’s boss says that this is a time when arrearage has become visible in the flows of revenues and payments of many companies, and many banks are still reluctant to grant loans even though they would be a solution to contain the arrearage.

"This is a hard time for the entire economy and we need simple lending products to address liquidity issues. Unfortunately, talks in Romania are too long and sophisticated about what should be done when there are plenty of examples and measures that work in other countries in the European Union such as France, the Netherlands and Germany and could be adopted right away."

Banca Transilvania yesterday launched a line of credit for SMEs, where the required guarantees are 80% secured by the Credit Guarantee Fund and the remaining 20% by the bank. The interest is 15% per annum for RON and 9.5% per annum for euros.

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