IMF: Romania’s banking sector, ready to face external shocks

The institution’s analysts said the negative effects of the turmoil registered on the mortgage loan market were limited in Romania and the powerful increase of the credit market continued. The leu depreciated and came back to the level recorded at the beginning of the year, reflecting the volatility of the capital inflows.

Yet, tensions arising from the global credits market resulted in concerns voiced by analysts which feared Romania is vulnerable to external shocks. Their fears were fueled by the fragility of the political environment.

The country’s economic growth is expected to remain sluggish at 6 percent this year, due to the effects the drought had over the agriculture this summer, IMF said. The institution recommended the Central Bank of Romania to focus on tempering the inflation, as forecasts for 2008 are not positive.