Bankers are expecting higher interest on loans

BNR recently increased the key rate to 9 percent and decided on higher provisions for foreign currency loans. The provision rise “will lead to a similar increase in costs paid by clients for loans,” Bancpost President, Mihai Bogza, told Business Standard.

This January, loans granted to companies and individuals rose 66.8 percent year-on-year, up to RON 154.25 billion (€42.34 bln), due to a spectacular 89.1 percent increase in foreign currency loans, up to RON 84.91 bln (€23.3 bln).

By March 26, banks will have to increase their provisions for foreign currency loans by 2-3 percentage points. On that same day, BNR is likely to increase the monetary policy rate by a further 0.5 percentage points, up to 9.5 percent, amid strong inflationist pressures. “If the National Bank increases the key rate by 0.25 percent, it its possible that banks will not adjust interest on loans and deposits, but if the increase is of one percent, the move will be adopted by lenders, with the percentage increase being adjusted in relation to each bank’s policy,” Bogza said.