NBR keeps interests high

The National Bank does not feel a further strengthening of the monetary policy would be required at the moment, NBR vice-governor Cristian Popa says.

“The central bank vows to consolidate the attitude of the monetary policy if the inflationary expectations tend to amplify beyond what we already know. The current intervention interest, 21.25% is adequate for the macroeconomic developments of the moment,” Popa says, specifying the “consolidation of the policy attitude” would not necessarily entail a new rate hike.

The non-governmental lending progressed by no less than 50% in real terms in the first month of the year from the same time in 2003, compared to 49% at the end of last year and 30% in late 2002.

The increase in January was of 2% in real terms, visibly lower than the 4.4% in December 2003.

The central bank is pleased with this “curbing” of the non-governmental lending, at least for the time being.

“We want to see sustainable credit growth, without spectacular changes of pace from one year to another, and avoid stop and go experiences,” Cristian Popa says.

NBR monitors the lending growth pace from an aggregate demand standpoint, the dynamic of which needs to be carefully controlled so that the very bold inflationary goal can be attained. “The high interests are the very obvious response to the quick growth of the aggregate demand,” Popa explains. He says the monetary policy actions taken by NBR need 3 to 4 months to take effect, which means some of them are not finished yet.

The vice-governor explains the successive increase in NBR’s intervention interest has not pushed for a similar growth in the interests operated by the commercial banks, which proves their high liquidity.