RO banks accelerate lending in July, local currency lending gains ground

The stock of non-government (private) lending increased by 7.9% year on year to RON 263 billion (EUR 55.6 bln) at the end of July, accelerating slightly from 7.1% one month earlier according to the central bank data.

In real terms, private lending increased by 3.7% year on year accelerating from 2.9% at the end of June. In July alone, the stock of loans increased by 1.2% (compared to the end of June) in nominal terms, and by 1.4% in real terms.

The volume of loans denominated in local currency increased by 10% year on year, much faster compared to the volume of foreign currency denominated loans (+4.1% ), which stands for gradual decline of the currency substitution (the use of foreign, more stable currency for financial intermediation purposes) supported by the retail lending being predominantly in local currency.

Expressed in euro, the volume of foreign currency loans increased by only 1.7% year on year. At the end of July the loans expressed in local currency held a weight of 66.6% in the total of the non-governmental credit, which is the highest value in the past decades.

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