UniCredit chairman: It is impossible to predict what the NBR will decide next

Interest on RON loans is bound to go up if the central bank increases the rate of minimal mandatory reserves again, says Rasvan Radu (photo), executive chairman of UniCredit Romania. “In case of new increases in the minimal mandatory reserves rate, there will be changes in interest rates. I don’t expect interests to be influenced by the increase in the minimal mandatory reserves now, because that (increase) was not that significant. It is impossible, however, to predict what the NBR will decide next; the move will be related to the inflation target,” Rasvan Radu says. UniCredit does not plan to modify interests at the moment, neither for assets, nor for liabilities. Any move is made in line with the trend of the market and there is no need for such a thing at the moment, the chairman of the bank says. A reduction in the interest rates on RON will become possible only after the minimal mandatory reserves rate goes down, Radu was quoted as saying by Mediafax news agency. “There is hope for a decline in the minimal mandatory reserves rate next year, when we should be implementing European legislation gradually,” Radu believes. He says he does not expect the NBR to resort to a new tightening of the monetary conditions in August, but such a move cannot be ruled out. The central bank took steps in June to temper RON lending, feeling it was fuelling an “unsustainable” growth in consumption.