The three-month Euribor, the indicator to which thecost of loans to customers is tied, has gone up to 1.17% from 0.6%in the summer of 2010, on fears of ECB raising the key rate foreuros.
The loans in euros, which account for two thirds of the fundinggranted by banks to companies and individuals, will become moreexpensive this year, as the European Central Bank raises the keyrate to fend off inflationary pressures created by the skyrocketingoil prices.
As far as a customer with a 30,000-euro mortgage loan repayable in30 years is concerned, a one-percent interest rate increasestarting from 5.8% per annum (the market average at the momentaccording to National Bank of Romania data) leads to an increase ofthe monthly instalment of 20 euros to 226 euros.
Anticipation created by the recent comments from the bank'sofficials about the key rate alone drove up Euribor, which reflectsthe cost at which top banks lend euros to each other, to thehighest levels since the summer of 2009.
ECB's key rate has stayed the same at the all-time low of 1% perannum since May 2009.
The oil price has almost doubled since last summer and along withthe increase in food prices drove eurozone inflation to 2.4% at themoment, higher than the cap accepted by the ECB, 2%. Under thecircumstances, analysts expect 2011 to see two or even three eurokey rate increases.
Nicolae Dănilă, economics professor and former BCR chairman, says aspiral is about to begin that will take interest rates much higherthan the current levels, which will cause some euro zone countries,as well as some other countries in the EU, to request debtrestructuring. Those to suffer the most might be the companies andindividual customers to which banks might transfer some of theincrease in loan prices.
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