Tanasescu says foreign market cheaper

The funding of the budget deficit from foreign sources has reached about 80% this year compared to the initial 50% target, but Finance minister Mihai Tanasescu says the interest in the domestic market will increase only “when it offers better terms.” “As soon as the domestic market reacts, we will go for higher loans. I do not like this large gap between active and passive interests,” Tanasescu said. After all, he announced a month ago that most of next year’s budget deficit would be financed by a new eurobond issue worth one billion euros. The maturity of the bonds could be extended to ten years, compared to seven for the previous issue released this year in case the interest goes below 5%. Romania borrowed 700 million euros through the release of a seven-year eurobond issue at a 5.75% interest this summer. The Finance Ministry’s preference for the foreign market has rendered National Bank of Romania’s purging effort considerably harder, with the latter repeatedly mentioning the release of deposit certificates to make its job easier. ZF