After letting other bank officials do the talking for one week, the National Bank governor Mugur Isarescu yesterday decided to stand up and send a warning: the banks have granted and the companies and natural persons have taken too many currency credits.
The current situation is not necessarily the problem, but the fact that this currency-lending trend is spreading and things could spin out of control. During the latest round of talks, the International Monetary Fund (IMF) has urged the Romanian officials to deal with this situation as soon as possible.
Isarescu also tackled the increase of the ROL/USD exchange rate. Even if this trend cannot be grounded on the market demand and offer, the NBR wants to see the dollar grow stronger. The inflation drop, which exceeded all expectations, enables the central bank to accept a bigger exchange rate. In fact, the increase of the exchange rate is one of the instruments the bank is counting on to put a lid on currency lending.
Perhaps for the first time, the NBR is using "verbal statements" as a monetary policy instrument, in order to try and influence the forex market: to increase the ROL/USD exchange rate, also letting bank managers know what the central bank is after.
However, bankers are concerned about other issues. They want bigger profits and more clients, claiming that an exchange rate increase is ungrounded, as the forex market is full of dollars.
"Even if they aim to cut the economy dollarisation, they should keep in mind that banks are confronted with currency demand. People's distrust of the Romanian leu is a reality and, even if they lose on paper when they keep their savings in ROL, they prefer the safety offered by the dollar and the euro. And if they want foreign currency, both for deposits and for credits, banks cannot refuse to take their currency or to lend them foreign currency," says Bogdan Baltazar, chairman of the Board of BRD-SocGen.
According to Baltazar, people's lack of confidence in the ROL is fuelled by the lack of restructuring and reforms in the economy and the financial sector.
Furthermore, Petru Rares, chairman of Banca Romaneasca (Romanian Bank) feels that, no matter how hard the central bank tries to quench the economy's appetite for dollars and euros, it should consider the fact that many banks grant funds from external financing lines obtained from the international financial bodies. And these funds come in foreign currency.
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