NBR’s economy boosting: interest cuts in small steps
The National Bank needed more than one year to cut the key rate
on RON by 3.75% to an all-time low of 6.5% per annum, even though
the economy slipped into recession in the summer of 2008.
NBR yesterday took one more step towards making loans cheaper, by
cutting the key rate by half a percentage point, to 6.5% a year,
but warns again that bankers are behind with adjusting interests
charged from their clients.
The decision was expected by most analysts and players, given that
inflation fell back to levels accepted by the NBR in February and
the RON is following an upward trend, so that the impact on the
forex and monetary markets was insignificant.
Bankers are pleased with NBR's move but remain sceptical and say
more needs to be done if lending is to be resumed, especially in
terms of risk perception.
"We, too, are interested in having the economy move and the
consumer and mortgage lending pick up because they are stagnating
now. What NBR has done is consistent with a normal policy," says
Sorin Popa, deputy CEO of BRD-SocGen, the second largest bank on
the Romanian market.
Even after this step, NBR remains the central bank with the highest
interest rate of all central banks in the EU, although the economy
is unable to resume growth.