“We believe the delay will be largely recovered and some of our decisions will be reflected in lending,” Isarescu said in a news conference Thursday, adding the monetary policy rate reduction overlapped with an extremely tense economic environment in Europe and in local banking.
The central bank governor went on saying that mother banks asked their subsidiaries, especially Greek and Austrian ones, to improve their loan to deposit ratios, which in some cases stood at 3 to 1 or even 4 to 1.
Lending resumption, according to Isarescu, is exclusively linked to the deleveraging throughout Europe.
“It is a structural problem and, like any structural problem, it takes time,” the central bank official said.
Romania’s central bank Thursday cut its key monetary policy rate by 25 basis points for the fourth consecutive time to a record low of 5.25% a year, amid a falling inflation and subdued domestic demand.
Private lending fell 0.7% in real terms to 222.28 billion lei (EUR50.9 billion) in February compared with the previous month.