After having worried last year about the evolution of the main macroeconomic indicators, the National Bank of Romania Governor Mugur Isarescu can relax. Or at least this is what he implied yesterday: “according to our statistics, we can conclude that the macroeconomic situation is resuming a positive trend.” Inflation is under control, and could even drop below nine percent (as originally scheduled), exports surged in February, savings are growing, whereas the currency reserve is back to comfortable levels, after the losses incurred in late last year.
However, the only thing that’s clouding the NBR Governor’s sunny prospects is the rising foreign currency lending. “Watch out for the foreign currency lending. After the first two months of the year, the non-government lending in foreign currency has outpaced the ROL lending. The lower costs associated with the currency lending, prompted by the foreign markets, and the more expensive ROL loans (after we decided to up interest rates) make us expect a bigger appetite for foreign currency when it comes to loans. We believe that the banks are not advising their clients to go for currency lending. That would not be appropriate advice. There is a lot of uncertainty on the foreign markets, no one knows where the EUR/USD exchange rate is headed. What the banks are not telling their clients, we are going to say out loud. There are two certainties: interests levied for ROL loans will surely drop, whereas the rates for euro and dollar credits will go up. The banks must not advise their clients to contract currency loans by relying on outdated information,” Isarescu warned.
Whereas the central bank is concerned with the fast-paced growth of currency loans, it is however pleased with the growing savings, up 2.8 percent in the first two months of the year. The currency of choice, in the case of savings, is the ROL. “Romanians have learnt that it is more profitable to open deposits in ROL. Banking rates are up 1-3 percentage points, inflation is dropping, whereas the interest rates offered for currency deposits are small. All these factors have made the ROL increasingly more appealing. This is indeed a gain, which, nonetheless, needs to be preserved,” the National Bank Governor added.
The central bank is also noting the exports’ surge in February, grounded on changes in their structure, and the preliminary data pointing to bigger foreign currency inflows, in fact money sent back home by the Romanians working abroad.
According to the NBR official, should an inflation overperformance occur in the Q2, there may be chances for this indicator to even go below the 9% target for this year. Inflation in January and February 2004 stood at 1.7%, below the forecasts of the central bank. According to Isarescu, this evolution is likely to continue in March, as well.
Moreover, Mugur Isarescu outlined the significant contribution made by the Executive to confining last year’s current account deficit to less than 6% of the Gross Domestic Product. According to the NBR Governor, the authorities’ prompt reaction helped to avoid bigger slippages of the foreign balance and of the inflation rate.
oana.nuta@zf.ro