Romania Ctrl Bk Readies Measures To Discourage FX Household Lending

"Foreign money lending should firstly target exporters and those making foreign investments," Isarescu told MEDIAFAX.

He said exporters and local firms that make foreign investments are sheltered against currency exchange risks, unlike the bulk of the population.

"There's the issue of unsheltered debtors, of people who earn Romanian lei (…). For this category, we are drafting special measures to discourage lending in foreign currency," Isarescu said.

He added that the measures will most likely be prudential, in line with the European guidelines in the field.

Foreign money loans are often cheaper than domestic currency loans, which reflect inflation and official interest rates. However, when the national currency depreciates, individuals can have trouble making their payments.

At its latest monetary policy meeting March 31, the central bank left its main interest rate at a record low of 6.25% a year for a seventh straight time, while lowering the minimum reserve requirements for foreign currency liabilities to 20% from 25%.

Additionally, the central bank expressed the need for a "continuous assessment of trends in non-government lending" in order to secure "adequate developments in leu-denominated loans versus foreign currency-denominated loans."

Romanian private lending stood at 206.6 billion lei (EUR1=RON4.1035) end February, over 60% of which was in foreign currency.

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