State manages to borrow at less than 7% a year

The Treasury managed to borrow 1.2 billion RON yesterday by selling six-month T-bills at a 6.99% interest, more than it had planned, after a long period during which bankers hesitated to finance the state at such low costs.

The success comes at a time when reports in the international press say Hungary is now able to get funding under even better terms after suspending its arrangement with the International Monetary Fund and with the European Union.
On the other hand, Romania saw another around 900 million-euro tranche approved for release at the end of July, as part of the 20 billion-euro arrangement concluded with the international institutions. At the time when the loan was contracted in 2009, the Romanian authorities said international supervision would give credibility to Romania, enabling it to borrow from capital markets at lower costs. Hungary’s experience, however, raises doubts over the validity of these arguments.
“It is good for Romania to pursue its arrangement with the IMF. We could also borrow (from private markets, in the absence of the arrangement i.e.), but at higher costs,” says Lucian Croitoru, advisor of NBR governor Mugur Isărescu.