Interest rate increase tempers consumer demand

The growth rate of consumer credits slowed down in the first month of the year, marking a 3.1% monthly advance, given that banks significantly increased interest rates since last autumn, amid a strengthening of the NBR’s (National Bank of Romania) monetary policy. After eight straight months in which the volume of consumer credits advanced by over 4.5% a month, loans taken out by the population amounted to a volume of 56.8 billion RON in January, 3.1% higher than in the preceding month. From January 2007 to January 2008, only February 2007 saw growth rate fall under 4.5%, when the volume of consumer credits reported a 2.7% increase, shows NBR data. The slowdown in growth comes amid a one percentage point increase in the average interest rate for consumer credits (to 17.8% a year), while credits in euros became almost half a percentage point more expensive, and reached 11.15% a year. Credits in RON became more expensive amid a strengthening of the monetary policy, with the NBR increasing the interest rate from 7% in September, to 9% at the beginning of February, and 9.5% at the end of March.