Higher interests unable to persuade clients to save more

The increase in deposits made by individual clients both in RON and in foreign currencies continued to slow down in February, and reached one of the lowest levels of the past year. Deposits in RON made by individual clients had gone up by 30.8% at the end of February compared with the same time of last year, after the total volume of deposits stood at 44.7 billion RON (about 12 billion euros). The growth rate, however, indicates a slow down compared with January, 32.5%, with this being the third month of decline in a row. The increase is much smaller than the levels registered last summer, of over 45%. The slowdown is also influenced by the greater comparison base, given that RON deposits picked up speed at the end of 2006. Still, the reduction in the appetite for savings comes at a time when the monetary policy strengthening is in full swing, after NBR raised the key interest on RON by two percent from October through February (taking it to 9%), in a attempt to encourage people to redirect their money from spending to savings, given the build-up of inflationary pressures. Under the circumstances, the interests offered by commercial banks went up, but inflation increased a great deal as well, which eroded some of the gain generated by deposits.