HotNews asked European Central Bank officials this weekend whether interest rates for Romanians holding loans in euros would rise as a result of the ECB’s interest rate hike.

“We cannot comment on the commercial policy of banks – some banks may pass on possible future rate increases to their customers who have loans, and others may not – it depends on their commercial policy. And look what the Greeks have done,” ECB representatives say.

Greece decided to freeze mortgage rates for a year, absorbing the ECB’s interest rate hike and helping households cope with rising costs, according to an announcement made at a joint conference of bankers with the finance minister. The program covers about 400,000 loans, Greek officials say.

In essence, Greek banks are freezing interest rates at the Euribor level from March 2023 minus 20 basis points and will maintain it until May 2024 with the possibility of an extension.

The rate of a Greek with a mortgage before the use of this mechanism increased by 10-25%. In the case of Romanians, the rate increase for a client with a mortgage loan in foreign currency amounted to 19%, according to the BNR stability report.

See details here.

We remind you that the Stability Report (June 2023 version) shows that lending rates in lei will not increase, instead Romanians who borrow in euros with variable interest rates will have to deal with increased rates.

Contributions that will be required to be paid from now on will be calculated at the level before the last ECB interest rate increase. In effect, Greeks with euro-denominated loans will have a fixed interest rate for a year, knowing exactly how much they have to pay, no matter how much the European Central Bank’s key interest rate rises. This measure received the green light from the National Bank of Greece and the ECB.

The ECB aims to ensure a return of inflation to the target level of 2% in the medium term and will therefore have an approach dependent on economic data, officials of the European institution also sent to HotNews.ro.

“We are seeing a decline in inflation as the shocks that initially caused inflation to rise are fading and our monetary policy measures are being passed on to the economy. But the transmission of these shocks is still ongoing, making the decline in inflation slower and the inflationary process more persistent,” explained ECB President Christine Lagarde at the end of last month. At the ECB Governing Council, we made it very clear that two elements of our policy will be important: we will have to bring rates to “sufficiently restrictive” levels and keep them there “as long as necessary,” Lagarde added.