The bankers are in for a new surprise. The National Bank of Romania (NBR) might again increase the intervention interest rate on the monetary market from 20.25% to 21% in the next couple of months, Mugur Isarescu, NBR Governor on Tuesday announced.
Still, he promises bankers that interests will resume the downward trend next spring and follow inflation closely.
This would be about the third increase in the interest used by the central bank to purge the liquidity on the interbank market in less than four months. The non-governmental lending growth pace, which is much too high and said to be impossible to sustain by many, as well as the decline in savings due to the decrease in the interests on deposits to real negative levels, are some of the top concerns of the central bank along with maintaining inflation in check.
“The next two or three months are the time when an increase in interests is most likely to occur. We will probably see a 21% interest by yearend,” Isarescu said.
This increase is supposed to be lesser than those operated before it, when the central bank pushed the intervention interest up by one percent, which turned this interest into a benchmark overnight.
The National Bank Governor explained that as soon as this stage was completed, the central bank would sit and wait “to get confirmation of the effects, which usually occur four of five months later” for a while.
“In the spring of 2004, when inflation resumes a visible downward trend, the interests will of course go down in their turn,” the central bank governor said.
In the light of the latest developments, we may see another increase in the interests on the banking deposits, as it has happened every time. We may also see the lending become more expensive, even though this has not been officially announced.
Under the circumstances, the NBR Governor believes the non-governmental lending will grow naturally next year, following the spectacular surge in 2003.
oana.nuta@zf.ro