24/01/08
2007 sees an increase in bank deposits by the Romanian Diaspora
Bank deposits by individuals in both LEI and foreign currency increased more than 50% in 2007. This amount exceeds the deposits made by companies in the same period, according to a report by the Central Bank of Romania.
The bank deposits in LEI reached 42.4 billion LEI (11.74 billion Euros) in 2007, up 50.5% from 2006. The foreign currency deposits totalled almost 25 billion LEI, up 56.1% percent from 2006.
Companies had LEI deposits totalling 45.2 billion LEI, up 22% year-on-year in December 2007. The foreign currency deposits stood at 16.5 billion LEI, in the same period.
Value of Loans outweighs Deposits
Loans granted to individuals and companies totalled 148.18 billion LEI in 2007.
OUR PERSPECTIVE
An increase in bank deposits, particularly foreign currency deposits, was the anticipated result of Romania's 2007 entry into the E.U. The Romanian Diaspora in Europe, particular in Spain and Italy, are increasing their remittances home. We predict that remittances will peak in 2010-2011, when a sizeable population of Romanians will return and use their nest-eggs to buy homes. This phenomenon can currently be seen in the case of the Polish Diaspora; Poland joined the E.U in 2004.