Friday, May 6, 2011

Romania cbank to limit hard-currency lending

May 5 (Reuters) - Romania's central bank plans to tighten hard currency lending conditions for unhedged borrowers later this year, deputy central bank Governor Cristian Popa said on Thursday.

The "macro-prudential measures" could include a requirement that prospective borrowers have incomes and assets denominated in hard currency as well as imposing a lower indebtedness ceiling for households.

The measures would not extend to mortgage and real estate loans as Romania lacks domestic funding resources for maturities of 20-30 years.

"We do not wish to ban hard currency lending ... but we want that the risks of this kind of instrument be reflected in its cost," Popa told reporters on the sidelines of a conference.

"We want a sustainable relaunch of lending in Romania."

Popa also said the central bank's measures will not have a significant impact on sluggish economic activity with lending at low levels.

Data showed hard currency lending to households rose 4.1 percent on the year to 63 billion lei ($22.79 billion) in March. Most of Romanian hard currency loans are denominated in euros. (Reporting by Luiza Ilie; Editing by Ron Askew)

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