The Finance Ministry’s initial funding plan for this year, of 160 billion lei, has been already covered for several weeks and has been increased to 180 billion lei in order to have the flexibility to cover a larger deficit than planned, director general of the General Directorate of Treasury and Public Debt of the Ministry of Finance Stefan Nanu said on Tuesday, write Agerpres.
„From our perspective, the banking system is the basic pillar for us on financing. For any local market, the sovereign yield curve is the benchmark, for any issuer. From a sovereign debt management strategy point of view we have a very clear objective: apart from minimising long-term costs, and risk limitation, the development of the government bond market and the yield curve is key. We have the primary dealer system.
This year the financing went very well. All the investment segments that we target in the financing process, all the instruments, have gone very well, from the interbank market, retail instruments, Eurobond issues. Basically, we are well ahead of plan. The initially announced plan of 160 billion lei has already been covered for several weeks.
We have increased the plan to 180 billion in order to have flexibility,” Nanu explained at the Banking Forum, organised by Financial Intelligence. He pointed out that he attended the annual meetings in Marrakech of the Monetary Fund and the World Bank, where he had many meetings with investors, who generally appreciate Romania, although it is close to a sensitive geopolitical context.
„On the other hand, there are certain assets that, even if we are more querulous and we put them more on last places, are highly appreciated by investors. Political stability is one of them. We saw the reaction of the markets to the vote in Poland, for example. And this will continue to matter for Romania. The positioning of the energy sector in the area is very well regarded by the investment community.
It is true that this issue of twin deficits and the fiscal deficit is a concern. On the other hand, the other pillar of fiscal sustainability, the debt sustainability, as seen in the rating agencies’ reports, is a strong point for Romania compared to the median of countries with similar ratings,” said the director in the Ministry of Finance. However, he added that the state has an extremely good partnership on government programmes and, in addition to the government plans, the capital it has in EximBank, where there are programmes for large corporations, should also be taken into account. Stefan Nanu also brougt to mind the project to create the National Development Bank and mentioned that every effort is being made for it to be operational from an administrative point of view from 2023 and from a business point of view, from the fulfilment of its mandate, at the beginning of 2025.
