Private loans climbed to 41bn euros in December

Loans taken out from banks by the population reached 19.8 billion euros at the end of last year, a massive increase of 82% on 2006. Non-government loans went up to a sum equivalent to 41 billion euros in December last year and witnessed an almost 49% increase in euros against the end of 2006. The growth was backed by the rapid increase of foreign currency funding, which climbed 72% last year. Expressed in RON, the volume reached 148.18 billion RON, up 50.5% in real terms against December 2006- the fastest growth rate of the last few years. There was bad news in December for the NBR (National Bank of Romania), which had decided in November to strengthen its monetary policy through an interest rate increase for RON, by half a percentage point, to 8%. At the time, the NBR explained it had made its decision because of the need to slow down credits, which have already fuelled unsustainable consumption. However, the central bank has no more levers to fight against the foreign-currency denominated loan, which is the main growth driver. The minimum reserve requirements, the most effective “weapon” against the foreign currency-denominated loan, are already very high, at 40% of attracted sums.