ROL loans at 24-25% yearly interest. Nearly 50% lower than a year ago. This trend has taken speed in the second half and even the most bullish analysts could have hardly anticipated it.
The National Bank of Romania (NBR)'s attempts to make lending in ROL more inexpensive are starting to show, especially after the four percent cut in the liquidity that banks have to set aside as mandatory minimal reserves.
Two weeks after the latest interest cut, Banca Comerciala Romana (Romanian Commercial Bank - BCR) is again pulling interests on ROL credits down by 4% on the overall. Banca Romana pentru Dezvoltare (Romanian Development Bank - BRD), the second leading bank in the system, is preparing to do the same, as it has already announced plans to cut interests by 3 or 4 percentage points.
The interest decline on the financial market is becoming an overall trend, supported by both the central bank through its monetary policy and by the Finance Ministry, which is pressing for a decline through the interests offered, which have caught up with those offered by the commercial banks.
The first reason the banks have to make ROL lending more affordable is the large volume of cash in domestic currency, considering that the mandatory minimal reserves have gone down from the 30% of the total cash attracted, early this year, to 18% at the moment. Which trend - NBR says, will maintain.
NBR's policy was also backed by the Finance Ministry, which has managed to cut the yields on the T-bills by more than half: from 40% in January down to about 16%.
The declining trend is also showing on the deposit market: the one-month maturity is rewarded by the top two banks in the system, BCR and BRD with only 14%. At the same time, the Finance Ministry is selling T-bills for the population that come with 17% interest for three-month maturity, lower than the interest offered by many commercial banks for the same maturity. And this is how an anomaly of the Romanian market gets corrected: the safest investment instruments, the T-bills, come to get a fair price, "risk premium" no longer included.
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