Banks in Romania are more cautious in financing the state

Romania’s Finance Ministry recorded yesterday the second consecutive failure in a government bond auction. The ministry rejected all the banks’ offers for state bonds due in April 2024, as the demand from banks was too low and the yields were too high. The state wanted to draw some RON 300 million (EUR 65.8 million), but the demand from local banks totaled only RON 288 million (EUR 63.2 million). “The Ministry of Finance rejects all the purchase bids and regards them unacceptable based on the offered price,” according to a press release issued by Romania’s National Bank, which oversees the government bond market. The failure was anticipated by analysts, who expected a weak demand. “It’s not the most liquid security, and given the large internal and external uncertainties, the demand may be weak,” read the ING Bank, published yesterday morning. Last Thursday, the Finance Ministry failed to draw RON 600 million (EUR 133 million) in a government bond offer. The Finance Ministry was planning to attract RON 3.7 billion (EUR 812.5 million) from the local market this month. editor@romania-insider.com