Romania’s Treasury announced the official calendar of Treasury bill and bond issues for February when it plans to borrow RON 2.125 billion (EUR 450 million) from the local market.

The announcement came only a couple of days after finance minister Eugen Teodorovici said his ministry would stop borrowing from local banks and rely on households for financing the deficit instead.

The Treasury aims to draw 25% less than it planned in January, but 28% more than it actually borrowed. Out of the whole target, only RON 400 mln (20% less than in January) should be Treasury bills with a maturity of one year, while the rest is to be raised by re-opening existing benchmark bonds.

The aggregate target volume for the six scheduled competitive auctions is RON 1.5 bln, 25% below the target volume in January, with another RON 225 mln to be raised in non-competitive issues.

The Treasury managed to raise only RON 1.66 bln from the local banks in January, compared to a target of RON 3.7 bln. The so-called “greed tax” the Government levied on local banks at the end of last year likely influenced this result as banks were more reluctant to buy state bonds and asked for higher yields.

The Romanian authorities also plan to draw funds from external markets in February, through a Eurobond issue, according to Darius Valcov, an adviser to prime minister Viorica Dancila.

The Government has a cash buffer of RON 34 bln, which is enough for financing the budget deficit over a period of four months, according to Ziarul Financiar daily quoting government sources.

editor@romania-insider.com

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