The Finance Ministry’s need for RON will remain significant in autumn, with short-term securities issued in the last quarter of 2008 and the first half of 2009 already starting to mature.
The spike in debt repayment is expected in October, when T-bills and bonds worth 6.02 billion RON (1.4 billion euros at the current exchange rate) reach maturity.
"The Government’s funding need will remain high in the upcoming period. The faster than anticipated decline in budget revenues and the difficulties of adjusting public spending to suit revenue levels are putting pressure on the budget deficit and inflating the state’s funding needs," comments Ionut Dumitru, chief-economist of Raiffeisen Bank. He estimates the average monthly value of securities that will mature by the end of the year is 3.75 billion RON.
In August, the state had to cover 4.39 billion RON in matured securities. The August issue plan was targeted at attracting 6.5 billion RON, with the state also having to cover the deficit, in addition to refinancing matured debt.
Payments to cover the foreign public debt are added to the domestic debt. In August, the state has to pay 85 million euros of the foreign debt, according to data provided by the NBR (National Bank of Romania).
"T-bill issues on the Romanian market may dwindle in the second half of the year, as the Ministry of Finance received the first tranche of the loan from the European Commission in July, worth 1.5 billion euros," says Lucian Anghel, chief economist of BCR.
In addition, the Finance Ministry borrowed another 1.2 billion euros via a club loan, contracted with eight major local banks at the end of July, and announced a four-year euro-denominated bond issue on the Romanian market, to be launched on August 14. In addition to these amounts, the state will receive around 1.7 billion euros from directing a share of t
