Central bank decision to up key rate sparks rising interests among Romanian banks

Banks in Romania have started to announce rises in their interests at deposits and loans in Romanian currency leu (RON). The tendency comes as an effect of a decision of the central bank BNR to rise its monetary policy rate to 9.5%.

Alpha Bank, the Romanian Savings House (CEC) and Bancpost announced higher interests in RON this week, while others including the Romanian Commercial Bank BCR, the Romanian Bank for Development BRD-SocGen, Transylvania Bank, Unicredit Tiriac and ING Bank had taken such as early as April 1. Interests for RON deposits near 10% and even exceed the threshold.

Romanian Governor Mugur Isarescu, quoted by news agency Mediafax, has said that banks have changed their behaviour and were rising interests for deposits faster than for loans. That is opposite to last year’s tendency when banks were opting to rise interests for loans in a more common manner.

Repeated BNR decisions to rise rates to the level of 9.5% reached on March 26 led to higher rates starting April 1, when BCR, the biggest Romanian bank, was the first bank to make such a decision.

But several banks including Volksbank and Raiffeisen Bank are yet to follow suit.