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Romania's Finance Ministry to draw only lei 1.8bn from the market in December

The Public Finance Ministry (MFP) plans to collect only 1.8 billion lei through state securities in December, after it drew 2.2 billion euros through foreign currency bids this month and 1.73 billion lei through lei securities, the ministry announced.

The amount should be collected through three and five-year benchmark bonds.

The ministry got only 1.73 billion lei through state securities in November, although it planned to sponge 6 billion lei, as the ministry decided not to pay yields higher than 10 percent. Thus, MFP collected about 60 billion lei from the market in the first eleven months, up five times versus the whole 2008.

The state security emissions in foreign currency, which took place in November, were organized as the International Monetary Fund (IMF) postponed the third installment within Romania's external loan, which had to be sent in December. The European Commission (EC) also delayed the second installment worth 1 billion euros, part of the 5 billion euro loan.

IMF granted Romania the first two installments worth 6.57 billion euros within the external loan of 12.95 billion euros. The third installment, worth 1.5 billion euros, had to enter the country in mid-December to finance the budget deficit, but the Fund decided to postpone it.

MFP borrowed about 1 billion euros from the Romanian lenders in July, through a two-year club loan agreement to finance the budget deficit, and is now tackling the issue of a new club loan with the banks' officials, according to the president of Raiffeisen Bank Romania, Steven van Groningen, who deems a short-term maturity is more efficient for this kind of instrument.

The general consolidated budget deficit reached 25.5 billion lei after the first ten months, or 5.1 percent of the gross domestic product (GDP), according to MFP.

IMF and the local authorities agreed on a new deficit target of 7.3 percent of the gross domestic product (GDP) at the end of the year, according to an 8.5 percent economic contraction and a GDP of 497.3 billion lei.

However, the head of the IMF mission in Romania, Jeffrey Franks, deems the budget gap will widen to 7.8 percent of the GDP at year-end, also calculating the fiscal measures recently validated by the Constitutional Court.

Sursa: http://www.newsin.ro

Tags: billion euros percent through finance december ministry euro mfp

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