“The market wants more loans in foreign currency, as the interest rates stay low. There are cases when the client understands and assumes the risks related to the exchange rate, but cannot borrow in foreign currency,” Steven van Groningen told the 2013 ZF Bankers Summit in Bucharest.
The bank’s head expects local lending will pick up in 2013, particularly in sectors such as agriculture, IT and services and production.
“I understand that the central bank’s goal is to reduce the systemic risk arising from devaluation risk, but devaluation is speculative…A cheap loan in euros somewhat compensates the currency risk,” van Groningen told the summit.
The central bank introduced in 2012 a series of regulations to reduce bank lending in foreign currency for households, after non-performing loans in the sector had risen alarmingly.