For the first time in history, Romania on Thursday borrowed money at a negative interest rate, acting Finance Minister Florin Citu announced on Thursday at the opening of a government meeting.
According to data released by the National Bank of Romania (BNR), the Ministry of Public Finance (MFP) on Thursday borrowed 150 million euros off of banks at an interest rate of – 0.11pct per annum, through the issuance of treasury certificates at a discount with a residual maturity of 5 months.
The nominal value of the issue was 150 million euros, and banks submitted bids for 229.1 million euros.
“Today we have good news, historical news for Romania. Today, for the first time in history, Romania borrowed euros at negative interest rates in, as other developed countries do, which clearly shows a sign from investors that everything we have done so far is appreciated and what we said we will do further is appreciated. Investors are confident in Romania,” Citu said.
He explained that by negative interest the burden of loans is no longer shifted on to future generations and Romania is giving back less money than it borrows.
“Romania is borrowing euros at negative interest. It is a historic achievement. What does negative interest mean? It means that if we borrow a dollar, we have to give back 90 cents. We no longer shift the burden of loans to future generations, as we have to pay back less money than borrowed. That was done by countries with a higher credit rating than Romania. We have managed, with a caretaker government and the current situation in Romania, to borrow at negative interest rates, which is a historic achievement,” said Citu, according to Agerpres.