Stiri	Stiri afaceri	Stiri companii	Evenimente de afaceri

BNR: Banking system can continue the lending activity

As of Monday, the banks will have extra cash available, according to BNR First Deputy Governor Florin Georgescu who attended a meeting with Italian businesspeople.

The Romanian banking system is robust, well capitalised and can continue lending money to the actual economy under cost-effective conditions, but banks also need to give massive encouragement to saving to provide for lending resources in a dynamic manner, in the current context, BNR First Deputy Governor Florin Georgescu told Italian businesspeople at a meeting the day before yesterday, according to Agerpres. He pointed out that credit would probably slow down to 15 to 20 per cent, based on the projections of the Romanian Central Bank (BNR), as the annual growth rate of the consumer credit had reached 40 per cent from 50-60 per cent in real terms, as shown by BNR's latest statistics.

The BNR official explained the Italian businesspeople present that, by prudential measures, BNR had constantly acted to calm down credit growth speed ‘to levels that would have been consistent with those that could secure the inflation rate target set together with the Government.' ‘Against the background of a lower volume and of more expensive financial resources, as well as of some of the BNR's prudential measures taken in August and enforced in October, we anticipate that the credit growth rate will slow down to 15-20 per cent compared to yearly rates of 60-65 per cent or to around 40 per cent registered in September' said Georgescu. He explained that the phenomenon was also the consequence of the ‘opportune action' taken by BNR by successive rises of the key-interest rate. ‘In seven steps, the key-interest rate has been taken to where it stands now - 10.25 per cent. The steps started in November 2007 because inflationary pressures could be noticed as early as August-September 2007, which eventually undermined the inflation target for last year,' said the Central Bank official. Unimpresa Romania, the Italian Enterprises Union in Romania has recently organised a meeting of the Italian business community here and Central Bank representatives, attended by Giovanni Ravasio, representing the president of the European Commission in Romania.

Reduction of required reserve ratio - opportunity to test the market

The reduction of the required reserves credit institutions must hold with the central bank is a good occasion to record the response of the market and to analyse the opportunity of further such measures in the future without destabilising the inflation rate target and without endangering the country's financial stability, Florin Georgescu also stated, according to Agerpres. He stressed out the fact that the aim was to cut the current account deficit that had reached 14 per cent in 2007 - very high compared to the domestic financial resources. According to him, at its latest meeting on October 30, the BNR Board of Directors decided to reduce the cash asset ratio for banks' liabilities in RON from 20 per cent to 18 per cent starting from November 24, 2008 until December 23, 2008.

‘As of Monday, the banks will have extra cash available as a result of this particular measure that was designed to improve liquidity management on the inter-bank monetary market while also creating the premises for a sustainable financing of the actual economy' said the BNR representative. ‘Under such conditions, BNR will continue to be especially watchful about its objectives' being attained - secure price and financial stability,' he added. Florin Georgescu further indicated that the rather limited effects of the global financial crisis that have manifested themselves reasonably in Romania so far were, to some extent, the result of the fact that the required reserves banks must hold with BNR for liabilities in the local currency as well as in foreign currencies were high, therefore allowing the Central Bank to adjust banking system cash liquidity incrementally according to the monetary and foreign currency market.

Florin Georgescu warned about the fact that, in the current international context that ‘also has local repercussions,' BNR was slowly turning from a net debtor of the banking system into a net creditor of the same system.

BNR's strict regulations keep Romania safe from immediate financial risk

Romania is not facing immediate risks, having successfully avoided banking system loss thanks to BNR's highly strict regulations, Razvan Orasanu, State Counsellor working for the Prime-Minister's Chancellery stated at a debate on the global economic crisis and how it might affect Romania, organised by the British-Romanian Chamber of Commerce, a press release informs. Moreover, BNR's EUR 26 bln reserves could always compensate for possible major problems of the banking system.

The starting points in the debate were various statements by a number of financial and banking organisations, suggesting that Romania is in imminent economic danger. The State Counsellor challenged the fundaments of such analyses. Looking at pertinent economic indicators, the conclusions of the meeting were that, although the international crisis would most certainly affect Romania, its effects could be kept under control.

The government official stated that the rate of economic growth in Romania might be lower than in 2008 but the economy would feel the crisis to a lesser extent compared to other EU states. There is also the possibility of a slower economic growth rate of 4-5 per cent in 2009. Recession in the US and Western Europe could hit Romanian's 70 per cent exports to such markets. It will probably become more difficult for companies to obtain loans for development and announced investment might be postponed, diminished or even cancelled.

 

Sursa: http://www.nineoclock.ro

Tags: growth central credit lsquo could economic romania financial italian meeting continue system banking lending according georgescu florin bnr

Articole similare