Deposit interests do not cover inflation

The average interest rate for individuals' deposits shed half a percentage point in the first two months of 2011 and reached 7,1% per annum in late February.

In parallel, inflation climbed to 7.6%, so that depositors came to realise interest rates from banks no longer keep up with price increases.

Inflation slightly climbed above the average deposit interest rate of the summer of 2010 in the wake of the VAT hike, but the gap widened in February, when foodstuff prices soared and drove inflation up by 0.6%.

The real interest rate (the gap between inflation and displayed interests) should re-enter positive territory as the impact of increased fiscality wanes, analysts say.

Despite the falling interests, individual clients have saved further over the past year and in late February held lei-denominated deposits worth almost 66bn lei (16bn euros), up 7% from a year ago.

Analysts expect individuals' deposits with banks to rise further in the following months, on a feeling of caution among consumers and on the rising disposable income.