The stock of bank loans to non-government (households and firms) increased by 8.8% y/y to RON 370 bln at the end of April 2023, further losing momentum from 10.2% y/y in March.

The loans denominated in local currency edged up by a mere 1.6% y/y (to RON 251 bln), as the households’ balance of loans with banks increased by 3.3% y/y and the companies reduced their stock of RON-denominated bank loans by 1.6% y/y.

In contrast, the stock of foreign currency-denominated loans increased by 27.9% y/y (to RON 119 bln). Particularly, the companies borrowed such loans (+42.9% y/y to RON 95.4 bln).

Commenting on this trend, induced by the rising cost of the local currency loans, National Bank of Romania (BNR) governor Mugur Isarescu cautioned against taking exchange rate risks.

There are signals that the European Central Bank (ECB) and the FED (Federal Reserve) will [further] increase their policy interest rates, so those who rush to take loans in foreign currency, considering them cheaper, now must be careful – warned Isarescu, quoted by Ziarul Financiar.

iulian@romania-insider.com

(Photo source: Ungureanu Vadim/Dreamstime.com)