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May 9, 2021

Banks resume competition for consumer loans in EUR, slash interests

Banks resumed the competition for consumer loans in EUR aimed at the population, and slashed annual effective interests (DAE) for this type of credits by 1.88 pc in January, to 6.55 pc – a historic minimum, according to data released by BNR and quoted by Mediafax. Contrary to the evolution of the DAE for consumer loans to population, the reference index for EUR interests, Euribor, at three months, slightly increased in January 2011 from 1.001 pc to 1.074 pc towards the end of the month. The DAE for consumer credits in EUR stood at 12.6 pc in January 2007, but dropped under 10 pc by February 2010.

Last year, this interest had a mixed evolution and reached 8.43 pc in December. Romanian authorities pledged to the IMF to monitor the evolution of loans in foreign currency and take measures, if necessary, to make sure that loans in foreign currency are expensive enough to reflect the associated risks posed to the debtors exposed to currency risk. The commitment has been assumed as the volume of foreign currency loans is almost the double of those in RON. BNR Governor Mugur Isarescu repeatedly warned about the high risk of loans in foreign currency for debtors whose incomes are in RON, and also about the risk posed by non-guaranteed consumer credits.

According to latest data released by BNR, the population took loans in excess of RON 101 bln, including the equivalent of RON 65.6 bln in foreign currency and only RON 35.5 bln in Romanian currency. Furthermore, territorial statistic figures show that the volume of consumer loans granted to households exceeded the equivalent of RON 37 bln in the case of foreign currency financing, far above the RON 26 bln cumulated by the loans in RON.

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