After Romania’s public debt had declined towards RON240 billion in January, the rising trend returned in February and March, with the share of debt to GDP reaching 40.5% at the end of March.
In the first quarter of the year the Finance Ministry sold government securities of almost RON19 billion, above the planned level for the first three months of the year. In addition, the Treasury borrowed EUR502.5 million and $1.5 billion during this period. The $1.5 billion was borrowed by the Finance Ministry in February through a bond issue in dollars with a ten-year maturity, at a yield of 4.5% per year.
As for the currency structure of the public debt at the end of March, the bulk of it – 46% – was denominated in euros, while the debt in lei accounted for 41% of the total.
Since the beginning of March, Romanian government securities were included in a JP Morgan index, which has increased Romania’s visibility on external markets and the interest of foreign investors, as well as creating vulnerabilities.
Public debt costs started on a downward trend in the first few months of the year. While in January yields on government securities with a one-year maturity hovered around 6%, in March the Finance Ministry ended up borrowing cheaper, with costs declining towards 5%. The downward trend continued in April and May, with yields falling below 4%. At auctions for three-year securities too, the yield fell from 6% at the beginning of the year to 5.5% in March and 4.9% in May.
The Finance Ministry has to pay back EUR1 billion to the IMF this year and central bank BNR has to pay back around EUR4 billion. In addition, 2013 is the year when bonds in euros worth EUR1.8 billion issued on the Romanian market mature.
The total amount that the Finance Ministry is due to pay in the 2009 – 2023 period nears EUR10 billion, EUR1.6 billion of which are interest payments and commissions.
(English version by Daniela Stoican)