BUSINESS

Bruynseels: BCR will not reduce interest rates

Banca Comerciala Romana (BCR), the largest bank in the system, will not reduce loan costs following the National Bank of Romania (BNR)’s decision to cut the monetary policy rate down to 6 pc, BCR chairman Dominic Bruynseels stated yesterday, Mediafax reports.

“There isn’t a close relation between the interest rates applied by the central bank and those other banks apply for their clients,” Bruynseels stated in a press conference. He argued that the modification of interest rates is more closely related to the banks’ funding costs and risk margins. This is the first time in a year and a half that BNR’s Board of Administration has reduced its monetary policy rate, by 0.25 pc, from 6.25 pc to 6 pc, thus sending a signal meant to support lending and economic recovery. BNR hopes that the gradual adjustment of real monetary terms will be reflected in the interest rates on loans granted by the commercial banks, but reiterates the importance of stimulating the internal saving process, by means such as the adequate remuneration of deposits. Analysts argue that the measure adopted by BNR has too reduced a scope to have a quantifiable impact on the market and should be seen more like a signal, while an actual modification of interest rates applied by the banks can occur only following a new monetary policy rate reduction. Bruynseels also added that the new regulations imposed by BNR will cheapen the price of the real estate properties that now are valued at over EUR 100 000.

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