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Central bank governor: Key interest rise aimed at encouraging savings in lei

The increase in the central bank's key interest rate to 9.75 pct per annum is aimed at encouraging savings in lei, but also at sending a signal to bank institutions, said National Bank governor Mugur Isarescu on the occasion of the presentation of the quarterly Report on inflation.

'We are concerned with encouraging savings in lei and this benchmark interest rate is adequately tailored for this moment to ensure financial stability,' said Isarescu. The governor added that savings in lei can absorb a part of demand in excess that strongly affects prices. Isarescu added that the banks still have a slothful response to BNR's signals related to foreign currency interest rates because commercial banks are still caught in a fierce struggle for market share. 'I don't think it is possible for us to strongly discourage lending at a time when certain markets haven't yet reached saturation,' the governor explained. Isarescu considers the banks must consider the national currency for ensuring financing resources, given the fact that financing from foreign highly volatile markets is quite risky. The BNR head also pointed out that despite comments of analysts who consider that BNR left leeway for further rise and that the 0.25 notch is too small, the 0.25 supplementation of the key interest rate is a perfectly 'normal step.' Sursa: http://www.rompress.ro

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