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Romanian Lenders Start Cutting Interest Rates – Bks Assoc Head

Romania’s President and other statesmen will soon find out that banks do the proper thing and cut interest rates for deposits, a move that will be followed by loan interest cuts and the lending revival, the Romanian Banking Association ARB president Radu Ghetea said Friday.
Romanian Lenders Start Cutting Interest Rates - Bks Assoc Head
05 iun. 2009, 19:53, English

Romanian President Traian Basescu said Friday he will no longer support banks unless they resume lending and lower their "outrageously" high interest rates.
 
Ghetea said that a reduction in the interest rates for deposits was seen after the central bank BNR decided to cut the key monetary policy rate by 0.5 percentage points to 9.5% and to cut to zero the minimum required reserves for forex-denominated passives with a with residual maturities of over two years.
 
“Unfortunately, that’s life. No commercial bank can say it cut interests for deposits. (…) No one advertised this because that’s normal,” Ghetea said.
 
The average interest rate at household loans fell 0.1 percentage poins in March to 16.21%, while the average interest rate for new loans grew 0.23 percentage points to 18.86%, according to central bank data.
 
As regards corporate loans, interest rates for deposits fell 0.91 percentage points in March to nearly 16.21%, while rates for new loans fell 0.1 percentage points to 20.58%.
 
Basescu met Wednesday with representatives of the central bank, of the Romanian Association of Banks and of major banks on the market.
 
After the meeting, Basescu said the banks’ reaction was not satisfactory and correct, adding he awaits “dynamism and courage” and also lower interest rates.