The Romanian currency has become even less appealing for deposits despite NBR's efforts to tighten its monetary policy since autumn in order to encourage savings.
In addition, foreign currencies are no longer as compelling either, although those who placed deposits in euros benefited from the exchange rate trend in the second half of last year. RON and foreign currency-denominated deposit growth slowed down in March for the fourth month in a row, and fell to the lowest levels registered since the end of 2006.
RON deposits increased by a mere 28% in March, in real terms, against the same month in 2007. As a result, the growth rate slowed down for the fourth consecutive month, and fell to the lowest level registered since December 2006. By late March, RON deposits totalled 45.8bn RON (the equivalent of 12.3bn euros)
The shrinking interest in RON savings came as the exchange rate took a rapid fall in the second half of last year. Since July until the beginning of this year, the RON lost around 18% against the euro. In fact, the level of RON deposits peaked last July, when the rate exceeded 45%. Since then, growth has slowed down constantly.
On the other hand, banks were late to reflect NBR's monetary policy signals in their interest rates for deposit.
Despite the NBR having raised the interest rate by 2.5% between October and March, which drove the rate to 9.5% per annum, customers only partially felt the move. The latest data from the NBR shows that the average interest rate commercial banks offer for newly opened term deposits climbed by less than half a percentage point, from a low of 6.3% per annum in August to 7.4% per annum in February.
On the other hand, annualised inflation accelerated from 3.8% in mid 2007 to 8% in February and 8.6% in March (according to National Statistics Institute data), which eroded gains brought by
