Foreign currency loans prevail

The ROL is not a suitable currency for long-term loans, as far as banking clients are concerned. Loans denominated in ROL and maturing in over five years accounted for only 1.8% of the total credits taken out by individuals and companies in March compared with 1.1% a year ago. The market’s preference for foreign currency is obvious in this regard, even though the risk associated with the exchange rate cannot be overlooked in the case of a long-term loan, as it often is with regard to short maturities. Long-term foreign currency lending accounted for nearly 11% of total funding (in ROL and foreign currency) at the end of Q1. This represents a four percent increase compared with 2003. This is primarily due to exchange rate stability, especially with regard to the ROL/USD rate, which has been fluctuating within a relatively narrow band for the last two years. ZF