The deposits attracted by local banks from individuals and companies grew by 9.5% in February compared to the same month last year, reaching some EUR 56.2 billion.

The deposits thus recorded the highest annual growth since February 2014.

The VAT cut left clients with more money. The people with low revenues used the money to buy more food whereas people with revenues above the average placed the extra money in bank deposits, as they had nothing to spend it on in the short term, said the economic analyst Dragos Cabat.

The Government cut the VAT rate from 24% to 20% at the beginning of the year.

Local banks had a balance of household and corporate loans of EUR 48.1 billion at the end of February, up by 2.4% year-on-year.

editor@romania-insider.com