In March, the volume of loans to non-government customers declined further to 217.86 billion lei (EUR48.9 billion), which is down 0.2% in real terms from the previous month, central bank data showed Friday. In February, private lending was down 0.5% on the month.
The decrease is mainly attributable to slumping demand for hard currency credit, while lending in local currency actually went up.
Private loans in Romanian lei rose 2.3% on the month in March, but foreign currency loans–which account for 60% of the overall loan portfolio–fell 1.9% when expressed in lei. When expressed in euros, foreign currency lending was down 0.9%, the central bank data showed.
Compared with March 2013, non-government lending decreased by 3.7% in real terms. Loans in Romanian lei went up 4.7% on the year in March, but hard currency loans were down 7.2% when expressed in lei and 8% when expressed in euros.
The central bank is trying to restart the lending activity, which should fuel the domestic demand. Since July 2013, the bank has lowered its key monetary policy rate in six steps to a record low of 3.5%. It has also cut the minimum reserve requirement ratios at the beginning of the year, freeing EUR1 billion from its coffers, but to little avail.
On the other hand, economic analysts are raising their forecasts on Romania’s economic growth this year, following good macroeconomic indicators in the first months of the month, but the improved perception is yet to be felt in the demand for loans.
Deposits of non-government resident customers fell 1.1% on the month to RON214 billion in March.
End-March, government credit reached RON81.9 billion, up 10.8% in real terms from the year-earlier month. (EUR1=RON4.4625)