June could have brought a correction in terms of foreigners’ investments, as shows high demand for euros on the forex market, reflected in a rise of the average euro/leu exchange rate by over 3%. Non-residents had a bout of hesitation over emerging markets amid fears the U.S. Federal Reserve will withdraw monetary stimulus faster than anticipated.
But tensions eased in July and the Finance Ministry managed to sell bonds in lei at yields of less than 5% a year including for five-year maturities, as well as bonds in euros – at a record-low yield of 2.75%.
According to May data, foreigners came to hold almost 28% of the overall portfolio of government bonds in lei and in euros issued on the external market, from a share of just 10% in 2010. This is close to a rather risky 30% mark. This level of holdings by non-residents could lead to significant tensions on the forex market if capital flows are reversed amid the external context.
(English version by Daniela Stoican)