Interest on loans and deposits return to 2006 level

Romanian commercial banks have double interest for euro-denominated loans, 8-12 percent annually, but worsening international credit conditions are pressuring the cost of loans. The influence is felt in interests and commissions for euro-denominated loans, while the increase for lei-denominated loans is determined by a rise in the key interest rate.

The massive depreciation of the leu could fuel inflation and attract a harsher monetary policy from the National Bank of Romania (BNR), which would lead to higher interest and less accessible loans.

The strategy of Romanian banks continues to be for risk reduction and increased insurance. The increase of costs for mortgages will be more tempered.

Interest on deposits also increased lately. Raiffeisen Bank announced that it will pay an annual 10 percent for lei-denominated loans due in 3 months between March 20 and April 30.