Foreign investors issue RON-denominated bonds

RON-denominated bond issues by renowned foreign institutions are becoming a common occurrence, while the Finance Ministry is delaying government bond issues month after month, pointing to the cash surplus registered by the Treasury. Foreign investors, lured by the ongoing high interests for RON and the steady RON appreciation trend, are pushing for the creation of instruments that may allow them to access the domestic market. Canada’s Toronto-Dominion Bank and more recently ABN Amro have developed such financial mechanisms, to cover some institutions’ need for cash and investors’ demand for placements in emerging currencies, through some currency and interest swaps that are favourable for both sides. “For non-resident investors, such as investment funds, bonds are highly appealing owing to the high interest rate and the issuer’s excellent rating. I do not believe residents will be highly interested,” says Ionut Dumitru, head of Raiffeisen Bank research department.