The government’s borrowing costs have begun to decline, amid positive international signals regarding the easing of tensions in the Middle East, Acting Finance Minister Alexandru Nazare announced on Friday.
"Good news, given the current geopolitical context and positive international signals regarding the easing of tensions in the Middle East: the government’s borrowing costs have begun to decline. Yields on long-term government bonds have fallen by approximately 25-35 basis points in just three days, and 10-year bonds have dropped below the 7% threshold. Investor interest in Romanian government bonds has risen sharply. At the latest auction of 12-month treasury bills, Romania raised 1.19 billion lei, more than double the amount initially planned. This is a sign of growing investor confidence in Romania’s ability to maintain financial stability,” he stated in a post on his Facebook page.
At the same time, Romania’s average yield fell to 6.11%, approximately 0.20 percentage points below the April level, meaning the government can now borrow at lower costs than just a few weeks ago, he noted.
"These developments come after a period in which markets reacted strongly to domestic political uncertainties, which temporarily drove up Romania’s borrowing costs to approximately 7.3% in the long term. However, amid positive signals from international markets regarding the easing of tensions in the Middle East, investors have returned to assets in the region," Nazare explained.
He noted that domestic economic fundamentals are sending a positive signal, given that Romania’s budget deficit in the first quarter of the year is, in nominal terms, approximately 22.5 billion lei lower than in the same period last year.
"These are the economic reasons that have led to the decline in interest rates in recent days—and not the suspension of the Ilie Bolojan government, as some reports in the public sphere mistakenly interpret. Romania remains under close scrutiny by rating agencies. That is why it is essential to maintain the path of economic consolidation and fiscal predictability, so that the trend of lower financing costs continues. Romania cannot go back to where it started,” emphasized the acting Minister of Finance.
AGERPRES
