Romanians’ RON loans hit fresh all-time high in August while savings are kept in hard currencies

Sorin Melenciuc 25/09/2018 | 12:56

Bank loans in RON granted to individuals rose by 1.5 percent month-on-month and by 20.2 percent year-on-year in August, up to an all-time high of RON 91.7 billion (EUR 19.7 billion) despite higher interest rates but Romanians prefer saving money in hard currencies, according to National Bank of Romania (BNR) data released on Tuesday.

Bank loans granted to individuals and corporate clients in Romania rose 6.6 percent year-on-year in August, to RON 244.9 billion (EUR 52.7 billion), and the amount of deposits increased by 10.5 percent, to RON 314.3 billion (EUR 67.6 billion).

RON-denominated non-government loans, which include loans granted to individual clients and companies, grew by 14.1 percent year-on-year in August, to RON 160,1 billion.

During the same period, forex-denominated loans declined by 5.1 percent, to RON 84.9 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 (5.1 percent in August).

RON-denominated deposits of residents (individual clients and companies) rose by 1 percent month-on-month to RON 208.5 billion but the annual growth rate slowed to 7.6 percent, from 8.5 percent in July, central bank data show.

Forex-denominated deposits rose by 1.8 percent month-on-month in August to RON 105.8 billion-forex equivalent, and by 16.9 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 August, bank deposits exceeded loans by 28.3 percent, as credit market is still affected by low demand, experts say.

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