The local currency government bond markets will finance investments in business and infrastructure, according to international financial institution Country Manager for Romania Elisabetta Capannelli.
Romania must make efforts to attract capital in an increasingly competitive international environment, the World Bank’s Country Manager for Romania Elisabetta Capannelli is quoted by a release as saying.
‘The local currency government bond markets will finance investments in business and infrastructure – sectors that support economic growth, create jobs and lift people out of poverty,’ the WB official told the fourth annual conference entitled World Bank Government Bond Market. According to the release, the WB supports the Romanian Public Finances Ministry (MFP) for consolidating the policies aimed at the management of the public debt and cash, by several aspects that may improve the Romanian domestic government bond market. Such aspects include a more robust regulatory and operational framework for the management of cash and transactions and responsibility management, drawing up a map of the trading infrastructure modernisation for the effective conduct of the trading on the primary and secondary market of the Romanian Treasury and consolidating the Treasure personnel’s capacity to apply active cash management and a responsibility management system.
MFP, in close coordination with the National Bank of Romania is implementing a reform programme aimed at curbing the financial risks the governmental portfolio is exposed to and for the development of a governmental borrowing market so as to support the development of the financial sector in general.
‘Supporting the development of the financial sector is one of our priorities. Supporting the domestic markets in order to improve financial stability and the capital flows is related to macro-stability and is in accordance with G20 agenda. Romania needs additional capital in order to support the economic growth rate and to continue the convergence with the European Union standards,’ the release quotes Romanian Minister-delegate for Budget Liviu Voinea as saying.
The Romanian public debt market is an example of complex reforms aimed at improving its functioning and efficiency, the WB representatives say. ‘As a recognition of this progress and of the improvements in the internal state debt market, Romania has gained international visibility and has attracted the investors’ interest from across the world. At the beginning of 2013, Romania was included in two major indices on the world bond market, that comprise the most important emerging market economies of today,’ the release says.
Over the last decade, the governments of the emerging economy countries have increased the rate of the internal markets’ funding, in local currency mainly. At present, over 80 percent of the public debt in the emerging economies is to the internal markets.
‘While the possibility to improve the efficiency of these markets continues to exist, this funding trend in the domestic market is expected to continue. This makes the emerging market economies continue a reform in the debt market that should allow them to satisfy the financing needs in a profitable manner, at prudent risk levels. The representatives of finances ministries, of the central banks, of the supervisory authorities from twenty emerging economy countries, local and international investors as well as market representatives are taking part in the World Bank Conference. They will discuss the trends, topics and possible obstacles that might shape the internal government bond markets in the coming years,’ the release said.