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NBS: Household deposits fell in July for first time since 2009
3 Sep 2013 Flash News
According to statistics released today by the central bank (NBS), annual growth in private sector deposits slowed significantly in July, by 1.9 percentage points, to 2.5 percent. In the same month, banks provided fewer loans.
“The decline of new orders in June probably resulted in a decline of corporate deposits, which fell by 1.7 percent,” NBS analysts informed the TASR newswire. “Household deposits also declined by 0.1 percent for the first time since 2009.”
In July, banks reported a 0.2-percent decline in loans and credits provided to the private sector. Year-on-year growth in lending slowed down by 1.4 points to 3.6 percent. With a renewed decline in short-term loans, the long-term loans fell as well, which, according to NBS, could point to a further decline in investment in the third quarter.
According to NBS analysts, the current low costs of borrowing money and lending volumes indicates that the problem is rather in the perception of greater macroeconomic risks by banks. Interest rates remain at record-low levels, with the European Central Bank lending to national banks at three quarters of 1 percent. On the other hand, banks are providing more loans to households. The volume of loans in July 2013 increased by 0.8 percent. In addition to continued strong demand for housing loans, the interest of households in loans for consumption also increased.
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