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Romania to avoid contracting more loans with EBRD and WB

Romania will avoid in the future contracting more loans with the European Bank for Reconstruction and Development (EBRD) or the World Bank (WB), following instead to, according to a long-term strategy drawn up by specialists with the Ministry of Finance, meant to cut such expenditures of the state with current and future loans.

According to the strategy, the Romanian state should instead sell state bonds to get the money. The strategy refers to the possibility of the state to sell such bonds with a 15-year maturity in the next two years and maybe long-term bonds, with 30-year maturities, later on, Cotidianul daily reads on Thursday.'In the case the conditions on the market will allow the issue of such state bonds with a 15-year maturity in 2009 we will probably be able to launch 30-year maturity state bonds in 2010,' said Stefan Nanu, head of Treasury and one of the main specialists having worked out the strategy.The domestic governmental bonds market, having been opened to foreign investors in 2006, is developing quite slowly, as following the low level in terms of issues and liquidity on the inter-banking market.Since the beginning of the year, the Minister of Finances has sold such bonds worth more than 5 billion lei (2.1 billion dollars) out of the total 11 billion lei initially estimated for this year. The issues will have maturities of up to 5 years, with the Finance Ministry being worried because of the increase in the outputs, in the context of the acceleration of inflation.The strategy estimates also that, in order to cover the budget deficits, the money will be used mainly from the domestic market. Thus, according to the strategy, the Ministry of Finance should contract loans on the domestic market up to 85 percent, with the loans on foreign markets, in euro, to stay at no more than 15 percent.The value of the increase in the country's public debt January through June stood at 8.9 percent, compared with the figures in end-2007, up to 88.87 billion lei (25.1 billion euros), with its most significant part of 57.2 percent denominated in Romanian national currency leu.

Sursa: http://www.rompress.ro

Tags: market billion loans bonds state strategy euro

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