Romania’s LT interest rate moves upward against the trend in Europe

The yield of the Romanian long-term debt (10 yrs) traded on the secondary market increased again in August 2021, to a staggering 3.72%, according to data published by the European Central Bank quoted by CursDeGuvernare.ro.

It has risen to the highest level in the last 12 months, after falling in February 2021 to only 2.65%.

From just 3.24% in July, Romania’s long-term interest rate moved upward, against the trend seen in European markets.

There were only several countries where the interest rate rose, but only marginally - in the Czech Republic (from 1.72% to 1.74%) and Hungary (from 2.83% and 2.84%).

Poland managed a marginal reduction (from 1.61% to 1.60%). Outside the euro area, Croatia (0.43% from 0.45%) and Bulgaria (stationary at 0.14%) performed much better.

The EU27 average fell again in the negative area, from +0.02% in July to -0.08% in August. Basically, Romania borrows money at record interest rates.

Romania ranks first in the top of the most expensive loans that can be taken by a member state of the Union.

The spread versus the second-weakest peer, Hungary, has widened. After a declining trend in previous months, the spread widened versus the Czech Republic as well and rose to a level 2.3 times higher than Poland, an economy with a similar currency regime and the closest in structure to the Romanian one.

(Photo: Tibor Duris/ Dreamstime)