Romanian central bank governor Mugur Isarescu on Tuesday called on banks to cut interest rates on loans, especially for performance companies.
Isarescu made the statement after the central bank announced the fourth cut of key rates in this year.
"We know very well the data of Romanian banking system and it is in the interest of banks to reduce interest rates as soon as possible and to the point where loan demand recovers," said the head of the central bank.
"Profit increase of banks will not come from the margin, but from the volume. Every merchant knows that long-term gains would be achieved by the volume, rather than the margin," he added.
The National Bank of Romania decided on Tuesday to lower its monetary policy rate to the historical lowest of 4 percent per annum from 4.25 percent, but to maintain the current levels of the minimum reserve liabilities rates on both the national currency and foreign exchange deposits.
Local analysts predict that the key rate would be further reduced to 3.75 percent and the minimum reserve liabilities rate for the national currency would be cut from 15 percent to 12 percent.