Romanian Household Indebtedness Requires ‘Close Monitoring' - Ctrl Bk

Romanian household indebtedness rose to a level that requires “close monitoring”, the central bank said in a statement Thursday, following a 0.25% hike in its policy rate to 10%.

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“The annual rise of credit to the private sector has edged down marginally, but its level remains excessively high, especially in what concerns foreign currency lending to households. Household indebtedness has reached levels that require close monitoring,” the bank said.

The central bank said Romanian household lending reached 81.75 billion lei (EUR1-RON3.6542) in April, of which RON45.12 billion (55%) represented foreign currency lending.

On Thursday, Romania's central bank raised its key monetary policy rate by 25 basis points to 10% on the year, from 9.75%, citing persistent inflationary shocks driven by forthcoming increases in administered prices such as natural gas and electricity.

The bank also decided to leave unchanged the existing minimum reserve requirement ratios on both leu and foreign currency-denominated liabilities of credit institutions.

The bank's decisions will become effective as of June 27.

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