ROL credits ready for takeoff

Companies and natural persons alike are beginning to favour credits in ROL over foreign currency lending, unlike the first half of 2002, when the euro and the dollar were the top financing currencies.
ROL credits granted by banks gained 7.1% in October alone, nearly double the increase in foreign currency loans. Overall lending in the real economy jumped 5.1% in October (the ten-month increase amounted to 23.3% in real terms), to some 165,000bn ROL.
The cost cuts for the ROL credits as of the second half and the indirect pressure put by the central bank on the other banks to have them diminish financing in foreign currency were but two of the causes behind this trend. The official figures at the end of November and December should be interesting to see, as the banks were more aggressive in squeezing interests on ROL credits during the two months. The lending in ROL may have increased quite a lot throughout this interval. The central bank officials, after all, were saying that non-governmental lending was expected to go up by nearly 30% in real terms this year.
There are several questions, though. Is the Romanian economy capable of absorbing these credits? Will businesses develop as much as not to affect the repayment capacity? Will there be an overheating of the Romanian economy? The answers will probably come in time.
At any rate, the central bank can now rejoice at the lending in foreign currency beginning to go down. The high foreign currency exposure of the banks was one of the problems mentioned by the central bank this fall. NBR argued that a more serious depreciation of the ROL against the USD or the EUR would affect the repayment capacity of those having contracted loans in foreign currency.