In the first quarter, sales of paper with maturities of six months or close to that accounted for nearly one fifth of amounts raised by the Treasury, ranking second in terms of amounts raised after one-year certificates.
“Clearly Romania’s image is better now than it was a year or two ago. The economic fundamentals have improved, although the restructuring is not over. We have to take advantage of the better perception and try to issue government bonds with longer maturities and reasonable yields,” says Ionut Dumitru, chairman of the Fiscal Council.
In the last two years, the state has been forced to preponderantly borrow on short term, amid investor reluctance to buy long-term paper. In March, 55% of active government bonds had maturities of less than a year, while 40% had maturities of between one and five years.
This month the Treasury is seeking to borrow 2.6 billion lei (EUR630 million) by selling one-year bills, which becomes the shortest maturity available. A further RON1.7 billion should be raised by selling three, five and ten-year bonds.
However, the shift in focus towards longer maturities, which entails the risk of raising lower amounts than planned, comes at a time when liquidity needs are low. (EUR1=RON4.1208)