BNR maintains harsh lending conditions

This means that BNR has decided not to adopt less strict lending measures. Maintaining key interest will not result in more relaxed lending conditions, although arrears on individual and corporate loans have surged lately. If BNR had decided to lower the benchmark rate, commercial banks could have adopted the same measure. However, loan installments have increased sharply lately, due to the depreciation of the national currency. Financial analysts explain yesterday’s decision by saying that the central bank intends to remain cautious because there is still no draft budget for 2009. BNR wants to see measures taken by the government before deciding if it will adopt less restrictive lending conditions or not. “BNR needs to see what economic policies the government will adopt,” said Daniel Daianu, former Minister of Finance. “BNR has adopted a ‘wait and see’ position. The next meeting of the central bank will be in February. If the next meeting had been later than February, BNR would have made a decision at this time. I think it will modify either the interest rate or the reserves in February, reducing one of the two, if not both,” said Lucian Anghel, Chief Economist of Banca Comerciala Romana (BCR). However, this attitude is being criticized by other analysts. Matei Paun, Managing Partner of the BAC Investment advisory company, said that BNR should have lowered the benchmark rate and the CRR long ago. “I would rather have a devalued leu, with a balanced current account,” Matei Paun told Business Standard. (B.A.)