“If an unrestrained deleveraging process overlays the fiscal correction, economic growth is significantly more difficult,” Isarescu told The EU-SouthEast Europe Summit in Bucharest.
“Since the debut of the crisis, 9 billion euros were withdrawn (from Romania) in five years, a third of which in only one year, 2013. A (discussion) on growth slowdown much consider this aspect, which overlapped a rather ambitious fiscal adjustment.”
Isarescu also said the fund withdrawals are coming to an end, as subsidiaries of foreign banks are largely financing themselves from the domestic market, and the process is helped by local regulators, which are promoting the lending in local currency.
The governor said “farewell” to “a destabilizing, a massive imbalance between lending in foreign currency and the local currency.”
“We are hoping the transition from dominance of hard currency loans to a balance between foreign and local currency lending will be orderly, without an aggressive cut of the loan-to-deposit ratio, which would further constraint the credit offering and, as a consequence, the economic growth of Romania.”