The increase in the interests on credits, indirectly induced by the central bank through certain monetary policy decisions it might make soon, would be quite risky, bankers feel. Why is that? Because, on the one hand, the Romanian economy still needs a lot of money and this step would only cap investments, but also because an increase in interests on credits now would primarily hurt those who have already taken a loan (in ROL especially) lately and who would find themselves having to repay visibly higher instalments.
“In the United States, the Fed cut rates to encourage investments. I think my position on the issue could very well stop here… Whoever dares to give the lead to an increase in lending interests now is very brave, because this would entail a very well devised economic model, which should allow forecasting and controlling any effects caused by a monetary policy decision, no matter it if is positive or not. The ideal of any emerging economy is to cut interests so that it could achieve economic growth in the end,” said Marinel Burduja, Raiffeisen Bank Romania vice-president.
He believes the effects of a possible lending interests increase on those now repaying loans should not be overlooked, either, as such effects in his opinion “could be very serious, indeed.” Also Casa de Economii si Consemnatiuni (Romanian Savings Bank – CEC) president Constantin Teculescu feels an increase in the lending interests would not make a positive impact on the economy and “if this decision is not well grounded economically, it cannot be maintained by any policy of the central bank or of the Finance Ministry.”
The financial-banking market in Bucharest is expecting certain monetary policy decisions to be made by the central bank soon, following completion of the talks with the IMF experts that warned the authorities in Bucharest the non-governmental lending was growing much too fast. oana.nuta@zf.ro