Romania plans FX bond issue at end-January

Romania's financing needs will decrease to RON 231 billion (EUR 46 billion) this year from RON 251 billion in 2024, in line with the 7%-of-GDP cash public deficit (8.6% of GDP in 2024), according to Romanian finance minister Barna Tanczos speaking for Profit.ro.

Fitch revised the Romanian sovereign rating's outlook to negative for neutral in December, and S&P announced an unscheduled review this month. Both rating agencies and Moody's keep the country at the lowest level of the investment grade territory, and Fitch was the first to revise the outlook negatively in response to the wider-than-planned fiscal slippage and political uncertainty.

The government of Romania is expected to come up with the 2025 budget planning by the end of the month after it endorsed a first fiscal corrective package at the end of 2024.

Out of total financing needs, RON 133 billion (EUR 27 billion) would be needed for the deficit financing and the rest of RON 97 billion for refinancing.

Romania plans to tap the foreign markets with an FX bond as soon as the end of January, Barna Tanczos said.

"We borrowed RON 251 billion in 2024 - RON 148 billion in the domestic market and the equivalent of another EUR 20 billion in the foreign market. RON 231 billion would be needed for this year if we go with 7% (cash deficit). We have a good position in terms of the Treasury buffer. We also have a positive element of stability with the higher foreign exchange reserves (at the National Bank of Romania) close to a historical level. We are tapping the foreign markets at the end of January," said Tanczos, asked by Profit.ro about plans for 2025.

(Photo source: Inquam Photos/George Calin)