Banks will pay more money in order to cover up possible losses from loans given in foreign currency to clients that are exposed to currency risks, the National Bank of Romania decided.
Thus, loans in foreign currency will soar at banks and other financial institutions, by the 26 of March. Banks will have to pay up to 7 percent more for standard loans and up to 8 percent more for loans that are “under observation”.
Also “sub-standard” loans costs will increase by 23 percent and loans that are ranked as “arguable” will make banks pay up to 53 percent more in order to secure possible losses.
According to a report by Fitch, cited by Bloomberg, foreign currency bank loans account for 54% of total bank loans in Romania.
Romanian citizens have loaned as much as 22,3 billion euros during the last year, which represents an 84 percent increase compared to the previous year.
Debt payments have already soared as the National Bank of Romania decided to increase its main interest rate by a full percentage point to 9 percent, on February 4th.
That was the third consecutive increase made by the Central Romanian Bank, as government spending and rising wages create inflationary pressures. The next rate meeting will take place at the end of March.
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