This is virtually the undesired effect of monetary easing with an impact over the households’ and companies’ appetite for saving.
Interest rates paid by bankers for deposits attracted from clients have plummeted in the past year, which reflected in the growth pace of savings. On the other hand, loan interest rates have dropped only in the wake of the adjustment of leu costs on the monetary market, while few banks narrowed down their margins.
Large banks, with a wide client base and relying on brand renown to retain depositors, had brought short-term interest rate toward 2-3% as early as in spring, but at present even interest rates for one-year deposits have descended below 3%.
Bankers were in a hurry to cut deposit interest rates in August as well, when the previous key rate adjustment took place. Banks’ latest moves have come despite the alarm bell sounded by central bank governor Mugur Isarescu about the very low interest rates and the risk that their further reduction may dampen saving, which has become crucial for banks amid the deleveraging process.
Small and medium-sized banks, which have kept interest above the market average in a bid to strengthen their client base, are also signaling they will drive interest rates lower.
No bank has announced loan interest cuts for the time being, but, on the contrary, many clients are likely to cope with higher installments starting this month due to the rising interest rates on the interbank market.
Banks are betting on clients’ low risk appetite and are slashing interest rates hoping depositors will not shift to more lucrative, but also riskier, placement alternatives, though. Bankers are also counting on the low inflation rate, which secures them positive real interest rates.
(English version by Catalina Apostoiu)