NBR reduces policy interest rate to 6 percent

After the new regulations for lending to natural persons was enforced on Tuesday, encouraging loans in national currency in the detriment of the euro and other currencies, on Wednesday the NBR reduces the policy interest, the so called key-interest, from 6.25 percent to 6 percent, thus offering banks the possibility of reducing their own credit interest.

The interests have been reduced as a consequence of the fact that the consumption prices went down in September for the fourth mouth in a row, based on food getting cheaper, and that the annual inflation has reached the 3.45 percent minimal level after 1990 and has entered the 2-4 percent target set by the central bank for this year.

According to analyst Răzvan Voican, the economy needs an encouragement in the actual context and also a stimulus in order to avoid as much as possible reentering the recession.

“The economy is in great need of an impulse, of an encouragement in the context in which the external problems are increasing and a stimulus is really necessary in order to assure that we will not fall into recession. Also, it was necessary that the message of support for the national currency lending which is given through the new regulation to be sustained to the level of the costs of the RON lending, as well”.

“We know that there is still a big difference. The national currency lending is far too expensive than the lending in euro and then bringing these costs to the same level becomes necessary along with these administrative regulations that try to re-orientate the market more towards the RON lending”, the analyst RăzvanVoican said.

“The application of the new regulation concerning the natural persons lending, associated with the decision made by the central bank on Wednesday will refresh the RON lending”, the President of the Romanian Bank Association, Radu Graţian Gheţea, said.

“It is a signal of reducing the lending interests and a signal that banks should look in a positive manner at the idea that once the new regulation concerning the natural persons lending is applied, solutions can be found to maintain a certain lending rhythm, especially with the RON lending”, Radu Graţian Gheţea said.

The National Bank of Romania has also decided to maintain at the actual levels the rates of the compulsory minimal reserve applicable to RON liabilities and foreign currency created by the commercial banks for the national banks.

The National Bank of Romania has not modified the key-interest since 4 May 2010.


Translated by: Violeta Mavrodin
MA Student, MTTLC, Bucharest University