EBRD: Romanian Banks Should Give More Loans In LeiPublish date: 12-11-2009
Romanian lenders' main challenge ahead is to offer long-term loans in Romanian lei, because is unhealthy for households and companies to be borrowing in foreign currency while their income is in lei, an official with the European Bank for Reconstruction and Development said Wednesday.
EBRD's chief economist Erik Berglof said Romanian banking sector reacted well to the financial crisis and the parent lenders' actions to support their local subsidiaries are closely monitored.
The situation is stable and the banks have taken commitments on the long term in Romania, Berglof added.
He said it is only natural that the parent bank's exposure to Romania will see a slight reduction on the short term, given that this is a direct consequence of falling demand.
Non-performing loans in Romania and unemployment rates are likely to continue rising in the next couple of years, though at a slower pace, the EBRD official noted.
However, Romania's economy should see a slight growth as of next year, Berglof said.
In October, EBRD revised upward its forecast on Romania's economic growth for next year to 1%, from a 0.4% advance previously estimated.
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