Banks offered RON640 million, but the ministry was not satisfied with the yield level.
Market participants said local lenders are less inclined to invest in government paper following the central bank’s decision to cap the amount offered at its weekly repurchasing operations.
Romania sold debt at increasingly lower yields in the first four months of 2012, but the trend reversed as the central bank halted a monetary easing cycle, citing uncertainties on external markets and political developments at home.
At the previous two-year bond auction July 16, the ministry raised less than a third of its planned RON650 million target at an average yield of 5.98% a year.
Romania expects to sell RON2.5 billion in debt this month, up from RON1.5 billion sold in July.
So far in 2012, the country sold RON38.23 billion in leu-denominated state notes and $2.25 billion in US dollar-denominated bonds. (EUR1=RON4.5362)