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Romanian govt approves loan moratorium for vulnerable people, firms

Romanian govt approves loan moratorium for vulnerable people, firms Source:pixabay.com

BUCHAREST (Romania), June 30 (SeeNews) - Romania's government approved a temporary moratorium on bank loan repayment by people and companies in financial distress as of July 1 as part of a 1.1 billion euro ($1.17 billion) package of social and economic measures aimed at mitigating the impact of accelerating inflation.

The moratorium was approved by Romania's central bank and by the Banks' Association, government spokesman Dan Carbunaru said during a press briefing on Wednesday evening.

In order to be eligible for the delay in loan repayment, individuals must declare that their monthly spending has increased by at least 25% year-on-year in the last three months, while companies must declare that their revenue has fallen by an annual 25% during the same period.

The government also approved a decree allowing students to take out state-guaranteed loans of up to 10,000 euro and families or couples to borrow up to 15,000 euro.

Earlier this month, the government decided that, alongside motor fuel retailers, it will cover 0.5 lei (0.1 euro) of the price of a litre of fuel at the pump for the next three months. Also, it will freeze employment in public administration and state institutions starting July 1 until the end of the year, in order to cut costs and reduce the budget deficit.

Romania's consumer prices rose by 14.49% year-on-year in May, compared to an increase of 13.76% in April, the latest data from the national statistical office showed.

In May, the central bank raised its monetary policy rate to 3.75% from 3.00% because of speeding inflation and war in Ukraine. This is BNR's sixth rate hike since May 2018.

(1 euro=4.9430)

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