Considering the difficult lending conditions, analysts have indicated that companies have cleaned out some local currency accounts to make payments, or transformed lei-denominated deposits into foreign currency placements, which registered a 6.6 percent growth rate in October. “Companies closed some local currency accounts to make payments, due to the lack of loans, and because interest rates were very high as the National Bank attempts to protect the leu,” Nicolae Alexandru-Chidesciuc, Senior Economist of the Bucharest subsidiary of ING Bank NV, told Business Standard.
Blocked lending has led to a 0.6 percent drop in loans, compared to September, the first slippage since January 2007, due to the decline registered by foreign currencies. The annual lending growth rate plunged to 44.8 percent from 60 percent in H1. The leu ended in October at RON 3.6/€ 1, appreciating from its September closing rate. This means that foreign currency loans have actually increased 0.4 percent compared to their September level. “Foreign currency loans granted to individuals rose 0.3 percent from September while those granted to companies by 0.6 percent,” added Alexandru-Chidesciuc.
