Population's bank savings are decreasing in real terms, investors are withdrawing their money from mutual funds, interest rates have become negative and they can no longer cover inflation, while the dollar is becoming again the best solution for the population's savings.
Over the last year, the inflation rate has exceeded by two percent the increase of the population's savings in the banking system, which means that, in real terms, savings are decreasing in their turn.
Over the first six months of the current year, the situation was even worse, as the population's savings dropped by 9% in real terms.
Financial crises, banks' bankruptcy, the FNI (National Investment Fund) scandal and the continuous depreciation posted by the domestic currency have gradually eroded people's confidence in the banking system.
The effects of this situation can be noticed at present, when people are no longer willing to save money as they simply have no money to save, following a decrease in the purchase power.
"The decrease posted by the population savings endangers the mediating function of the banking system. This should worry both the National Bank of Romania and the commercial banks," Dan Pascariu, the president of Bank Austria Creditanstalt Romania, told Ziarul Financiar.
"We shouldn't neglect the fact that, over the past couple of months, real negative interest rates have been registered, which led to a cut down in bank savings. Moreover, the purchase power decreased in its turn," Pascariu added.
The cut down in banks' interest rates currently generates people's reorientation towards T-bills, whose interest rates are higher. Also, interest rates' decrease makes dollar deposits look more attractive.
"I believe that people will gradually turn to dollars as it is not normal to have real negative interest rates. We keep maintaining interest rates at a low level, although inflation has reached 4.3% in July," Gelsor Asset Management president Adrian Radu said.
Mutual funds were strongly affected by FNI bankruptcy, some of them facing significant falls in the number of investors and large funds withdrawals. The net assets of mutual funds actually halved in June, down to 326.6 billion lei. Investments in mutual funds no longer offer the same profitability rate, as the opportunities offered by the monetary market have vanished, namely high interests for T-bills and banking deposits.
"On the whole, mutual funds' credibility was undermined by FNI fall, but also by the fact that the rate of return offered to investors is no longer appealing.
On the other hand, the depreciation of the domestic currency, the fall in interest rates, as well as "the summer," as investors put off important decisions for later, all these diminish investor's interest in mutual funds. I am positive that, starting this autumn, things will change," is the opinion of Daniel Marinescu, chairman of Vanguard Asset Management and manager of the mutual fund Oportunitati Nationale.
Population savings in the banking system are decreasing, shrinking the possibilities to invest in economy, as banks are lacking financial resources, and the shortage of investments lessens the sources of economic growth. At this moment, banks, mutual funds, the Finance Ministry and dollars are fighting over population savings.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
