Finance Ministry not desperate, yet borrows money

The yield of state bonds up for sale by the Finance Ministry began rising again, to 7 per cent a year, on account, among others, of interest being taxed, ‘Evenimentul Zilei’ daily writes. To say it differently, Finance Minister Sebastian Vladescu has the money the ministry needs, and yet, he borrowed from banks yesterday.

The interest commercial banks charge on loans to the Finance Ministry will keep rising, and the state will have to accept banks’ offer in a few months, economists say. “As of now, the state is not desperate, given that it has its funding needs covered for the next few months,” Romanian Commercial Bank’s chief economist Lucian Anghel holds. However, yesterday, the Finance Ministry drew RON 1 bln from commercial banks via a 14-day loan at an interest of 4.62 per cent, having sold Monday one-year certificates worth RON 88.9 M, much under the expected RON 750 M, according to Mediafax. Short-term liquidity drawings from commercial banks are one of the means the ministry employs to cover immediate funding needs.

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