ROL depreciation scares borrowers away

The clients of the commercial banks have lost some of their appetite for loans in November last year, as the depreciation of the ROL by nearly 5% in only one month disheartened those seeking to take out euro-denominated credits.

From a 5.7% growth pace in October, non-government lending slowed down by more than one percentage point in the eleventh month of last year, progressing by 4.5%.

If calculated in real terms, the growth for the first eleven months of 2003 reached an impressive level, 42.6%, which kept substantiating IMF’s warnings about the inherent risks posed by such a high speed. Compared with November 2002, non-government lending progressed by 47.2% in real terms, much faster than in the October 2002-October 2003 interval.

The demand for loans in November focused on the domestic currency mainly. Subsequently, if calculated in euros, the lending in foreign currency rose only 1.4%, half the progress made in October. At the same time, the lending in ROL went up 6.1% compared to 5.7% in the previous month. As a result of these trends, non-governmental lending amounted to 288,999bn ROL (nearly 7 billion euros).

All in all, the banks kept posting significant growth of the credit portfolios, with the amount of loans granted to corporate and individual clients 4.5% higher than in October.

The population’s savings in their turn increased by 1.4% to 97,160bn ROL in November and accounted for 22.8% of the money supply compared to 22.6% at the end of October. From November 2002 through November 2003, the population’s savings increased 15.9% (1.2% in real terms). Inflation in this period reached 14.5%.

Savings in the banking system have been following a slightly upward trend since late last year, largely because of the interest policies most banks applied.
razvan.voican@zf.ro ; oana.nuta@zf.ro