Romanians’ RON loans hit all-time high in July, but savings are kept in hard currencies

The bank loans in RON granted to individuals rose by 1.7 percent month-on-month and by 21.3 percent year-on-year in July, up to an all-time high of RON 90.4 billion (EUR 19.5 billion), despite higher rates, but Romanians prefer saving money in hard currencies, according to National Bank of Romania (BNR) data released on Friday.

The bank loans granted to individuals and corporate clients in Romania rose 6.6 percent year-on-year in July, to RON 243.3 billion (EUR 52.6 billion), and the amount of deposits increased by 10.9 percent, to RON 310.4 billion (EUR 67.1 billion).

RON-denominated non-government loans, which include loans granted to individual clients and companies, grew by 14.8 percent year-on-year in July, to RON 159 billion, household loans surging by 21.3 percent.

During the same period, forex-denominated loans declined by 6 percent, to RON 84.3 billion-forex equivalent, due to stricter rules regarding forex bank loans.

Bank deposits have become less attractive in the first months of this year, as a consequence of low interest rates and rising inflation (5.4 percent in June and 4.6 percent in July).

RON-denominated deposits of residents (individual clients and companies) declined by 1.4 percent month-on-month, to RON 206.5 billion, and the annual growth rate slowed to 8.5 percent, from 11.9 percent in June, central bank data show.

Forex-denominated deposits rose by 0.4 percent month-on-month in July, to RON 103.9 billion-forex equivalent, and by 16.1 percent year-on-year.

During the last couple of years, Romania’s bank clients increased their creditor status against banks due to strong savings and weak credit market, deposit holders being technically the banks’ creditors.

In July, bank deposits exceeded loans by 27.6 percent, as credit market is still affected by low demand, experts say.