Interest rates on deposits fall by 50%

Bankers have cut interest rates on RON deposits faster than
credit interest rates because the level of liquidity has improved
on the market and because they need higher profit margins to cover
losses generated by non-performing loans.
Some banks saw interests on deposits in RON almost halve
compared with February 2009, whilst interest rates on new loans in
the Romanian currency fell by just 25% last year on the market as a
whole, according to data from the NBR (National Bank of
Romania).
In February last year interest rates on deposits had climbed
towards 16% a year amid competition among banks over liquidity. The
lowest interest rates on deposits have now fallen towards 6% a
year, whilst most offers are in the region of 8% a year. Last week
saw the last few offers move from double to single-digit interest
rates.
Small banks used to be the most aggressive players on the
savings segment. For instance Portuguese-held Millennium Bank
offered an interest rate of 16% per year for 9-month and one-year
deposits. Now, for the same products, interest rates amount to
7.75% a year.