Romania is testing market for new FX bond

Romania’s Ministry of Finance initiated on March 26 procedures for new FX bond issues to tap the foreign markets for the second time this year amid elevated political volatility, which clouds the country’s fiscal stabilization and risks pushing its debt into the junk category. The intended FX bonds are denominated in euros and have maturities of 7 and 14 years.

The announcement comes after Fitch issued a note on the impact of the political uncertainty on the ongoing fiscal consolidation process of Romania, which got off on the wrong foot with a 1.6%-of-GDP deficit in January-February.