Romanian Bks Assoc Head: 2-3% Hike In '10 Pvt Lending Would Be Good After '09 Decline

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Ghetea, who is also head of state-owned lender CEC Bank, said an increase of 2% up to 3% in private lending this year would be a great step forward. He added, however, this must not translate into an increase of 2% up to 3% for CEC Bank, which will see a two-digit lending growth.

Ghetea estimates interest rates on leu-denominated loans will not go below 10% in 2010.

Ghetea also said things are a bit gloomy when it comes to savings this year, as both retail and corporate clients will no longer have money for bank deposits. He pointed out, however, that the upward trend, although feeble, will maintain in 2010.

Romanian central bank governor Mugur Isarescu on Friday said Romanian private lending is bound to return to growth in the following period, but there will be no jump-starting of the sector.

The central bank's chief noted the lending process will not put significant pressure on the inflation in 2010.

In 2009, Romanian private lending fell 3.6% in real terms to 199.8 billion lei (EUR1=RON4.1397).

Romania's central bank on Wednesday cut its key monetary policy rate by 50 basis points to 7%, the lowest level in more than two years, but kept the minimum requirements unchanged.

The move was widely expected by analysts, who predicted the central bank would want to send a positive signal to the banking market and kick-start lending.

Romanian annual inflation rate fell to 4.7% in December last year from 6.3% at the end of 2008, but the central bank missed its inflation target for the third consecutive year. The bank targeted an inflation of 3.5% for 2009, with one percentage point variation band around the target.

A similar target was set for 2010. The central bank predicted the annual inflation will reach 2.6% end-December.