Romanians in no rush to invest abroad

The partial liberalisation of the capital account as of January 2003, that is the possibility to directly invest on the foreign capital markets will not show in the amount of cash transferred by Romanians abroad, at least not in the short and medium run, the specialists in this industry feel.
Why is that? Because of the actual lack of an institutional framework, the meagre investment culture, the rather high costs such placements entail and, last but not least, the world economic recession which has triggered small yields even for the investments on mature markets.
“Considering the extremely low interest level for dollars and euros, as well as the lack of viable investment options on the Romanian market – also due to the ROL interest decline, we could easily assume that people will look for other options to invest their money, and this liberalisation is precisely what makes such opportunities happen. However, I do not believe we will see massive capital outflows soon after January 1, especially because of the lack of a proper institutional framework,” Dan Pascariu, HVB Bank Romania president told Ziarul Financiar.
Pascariu says that the success of such operations will ultimately depend on the cost of transactions, as commissions charged for such placements are known to be relatively high. It will also entail overcoming certain psychological barriers caused by the people becoming aware that their own money is transferred abroad and the risk for such operations is theirs and only theirs.
As of January 1, 2003, the new modifications of the foreign currency regulations will allow anyone to directly invest their money on the international capital markets. These transactions will undoubtedly come with much higher costs than those on the Romanian market. Under the circumstances, any investment below $5,000 will probably not be worth the effort. Particularly because the Romanian capital market and even the banking deposits in ROL are still promising much more attractive yields at a fraction of the cost.