Finance minister says Romania should borrow in advance to lower costs

Romania will secure its entire financing needs for this year with the next Eurobond issue and, in the second half of the year, it will borrow for next year, to be able to dictate the borrowing cost, finance minister Eugen Teodorovici said on April 18.

“It is exactly what any country does,” Teodorovici said, quoted by Agerpres.

“Romania is borrowing to finance current year’s needs. We have to change this strategy and borrow in advance for the coming years,” Teodorovici explained, adding that Romania would thus be able to get better borrowing costs because it won't be pressured to get cash at any price.

In essence, what Teodorovici said means that the Government wants to increase the cash buffer, in this case, the foreign exchange buffer, and hopes that this alone will result in lower borrowing cost. But the statement has a political dimension as well, under the circumstances that the public debt, external debt, government borrowing to pay wages and pensions while not building infrastructure -- are all of them topics climbing up on the electoral agenda.

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