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Economic tensions and over-indebtedness of the population - risks to financial stability

BNR official denies document on limiting household credit, wonders where does it come from

The recent document presented by the media, regarding an analysis on limiting the household credit, has not been made by the central bank, BNR Deputy-Governor, Liviu Voinea, said on Thursday.

“I’ve seen several reports on it. I would not comment, as it does not originate from the National Bank. When we have something to say, we say it loud and clear, we put it on debate. So, the document does not originate from us. However, analyses are ongoing for some time. It is ongoing for more than a year, with analysis on the household indebtedness and its sustainability. When we’ll have something to say, we’ll talk about it. The target is not to limit credit, but to direct it to sustainable directions and in a reasonable share,” Liviu Voinea said, according to digi24.ro.

Voinea argued that BNR wants to support credit, mainly in national currency over long term, for investments and with fixed interest rate.

The document released several days ago pointed to the fact that BNR wants to restrict household credit and intends to drastically limit the household indebtedness for mortgage and consumer loans. The new regulation could be enforced as of July 1, the same document read. According to it, banks could be forced to grant loans on stricter conditions. Currently the accepted indebtedness level can reach 70% for mortgage loans, depending on the bank.

Thus, reportedly as of July 1, a person wanting to get a loan in national currency to buy an apartment, the monthly rate must not exceed 50% of his earnings, for the consumer loans the limit will be 30%.

Economists reacted to say the decision is welcome, given that people have problems in paying the rates, due to the increasing interest rates. The 3-month ROBOR Index has reached 2.90%, the highest level in the past three and a half years.

According to capital.ro, an appendix to the regulation provided that the highest indebtedness level for consumer credit will be 30% for loans with fixed interest rate and 25% for loans with variable interest rate. For loans in foreign currency, the new regulation reportedly provided that the indebtedness level will be of only 15% for variable rates loans.

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