Lending and saving lose momentum in Romania

Both the stock of loans and deposits at the end of June increased at slower annual rates than one month earlier: the loans increased by 7.1% year-on-year while the deposits advanced by 7.7%.

But the patterns remained the same: households accumulate local currency loans in their balance sheets at a fast pace (+13.8% year-on-year) while building foreign currency deposits (+15.6% year-on-year) faster than local currency deposits (+8.7% year-on-year, but still 1.5 times larger than forex deposits). This might reflect the Romanians’ expectations for exchange rate volatility on the one hand and their propensity for consumer credit (driven by, among others, stronger revenues pushing up their borrowing capacity) on the other hand.

Forex denominated corporate lending is more active than local currency lending (+12.1% year-on-year versus 4.0% year-on-year), but still local currency corporate loans are 1.4 times larger when it comes to the corporate segment.

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