Romania’s Finance Ministry, borrowed EUR 150 million for the first time at a negative interest rate of -0.11% per year, on Thursday, February 26, by re-opening an issue maturing August 2020 (5-month residual maturity), local Mediafax reported.
The banks and investors placed orders in amount of EUR 229.1 mln, but the Treasury sticked with the EUR 150 mln target.
A negative yield practically means that the one who buys the bonds pays for the privilege of owning securities issued by a state considered at low risk. Romania thus joins the group of countries that take advantage of the loose monetary policy of the European Central Bank (ECB).
Romania’s National Bank (BNR) also decided recently to cut the minimum required reserve ratio for foreign currency liabilities by 2pp, which released some EUR 750 mln that local banks can now place in other assets.
“Today for the first time in history, Romania has borrowed at a negative interest. The PNL government is the only one that has achieved this historical performance,” acting finance minister and prime minister-designate Florin Citu wrote on Facebook, adding that Poland is the only other country in this region that has achieved this performance.
At the beginning of February, Poland also borrowed EUR 1.5 bln for five years, at an interest rate of -0.102% per year.
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Romania’s Finance Ministry has borrowed EUR 3 billion in its first bond issues on foreign markets in 2020.