Friday, August 1, 2008

Romania Central Bank Lifts Interest Rate

31 July 2008 Bucharest _ Romania’s central bank BNR on Thursday raised its main interest rate to 10.25 percent, the highest in the European Union.

The hike of 0.25 percent is the seventh this year alone, showing BNR's plans to prevent a boom in private borrowings.

Lendings registered a rise of 63.4 percent in the twelve months to June.

Higher interest rates and plans for restricting private borrowing are among the main factors that could lead to a crisis in Romania's real estate market, experts warn.

In a letter sent to BNR on Wednesday, the Romanian Bankers' Association asked the country's central bank to impose less credit restrictions otherwise "home prices may collapse." Read more:

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