The average interest rate on leu-denominated loans for individuals reached 12.7% a year at the end of December, 0.2% lower than in the preceding month, show central bank data.
However, when compared against the similar period of 2010, clients have to pay a 1% higher interest rate.
The image painted by the statistics is confirmed by readers polled by ZF, with almost 55% of respondents saying their loan installment had increased by over 10% in the past three years. Over 36% of the 1377 respondents say that in fact their installment increased by more than 20% during the crisis years.
The surprise cheapening of loans in December is due exclusively to the interest rate decline on the interbank market amid abundant liquidity on the market. Bankers find it hard to give up their earnings margins that they apply on top of the money market indicators (Robor or Euribor), especially if they pay more to attract resources from clients.
Three-month Robor, the indicator to which most loan contracts are tied, fell by around 0.2% over the course of December, to 6.05% a year.
The decline of interbank interest rates came after the central bank in autumn gave a signal it was easing its monetary policy, by cutting its key interest rate and by weekly repo auctions (in which banks receive liquidity in return for government bonds).
Analyst and financial consultant Florin Citu believes the additional liquidity pumped by the central bank into the system in the past few months has been absorbed by the Finance Ministry and will not reach the real economy until the Finance Ministry starts making payments.
He says boosting the money offering on the money market has not had a visible impact on interest rates and says this can be explained the one hand by the central bank making only short-term liquidity injections since mid-October 2011, and on the other hand by banks’ preferring to transfer additional liquidity to the Finance Ministry.
Citu sees the way out of this vicious circle by cutting minimum reserve requirements or by interventions to depreciate the leu, which would result in a permanent liquidity injection, and would also have an impact on longer-term interest rates, and ultimately result in lower interest rates on loans.
Despite the cheapening of loans in December against previous months, interest rates continue to be higher than a year before. On leu-denominated loans for individuals, the average interest rate was 11.7% in December 2010 and had climbed to 12.7% a year at the end of last year.
The difference is less visible in the case of companies, where the cost of loans was up 0.3%, to 9.74% a year.
As for euro loans, interest rates saw a slight decline for individual loans, to 5.9% a year, but were down 0.4% for companies, to 5.67% a year.
The interest rate decline was encouraged by the cheapening of financing resources, with the Euribor indicator being on a decline for several months.
(English version by Daniela Stoican)