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Financing costs in euros for the Romanian state rose sharply from 1.2% to 3.2% for 10-year government bonds, as Romania awaits a major decision from the rating agency S&P in early June, says Mihai Purcărea, CEO. from BRD Asset Management.
“We are talking about very high financial costs for Romania and for all of Eastern Europe, but it seems a bit more in Romania. Before the crisis began, the cost of financing in euros was around 1.2%, now we are talking about a financing cost of 3.2% for 10 years. If the Romanian state were to seek financing in international markets, it would have to pay more than double than 2 months ago, “said Mihai Purcărea, CEO of BRD Asset Management, during the ZF videoconference “Restart Romania. What will the new economic era be like?”
Also read: The reaction of the magistrates after the ECHR decision in the Kövesi case: ‘It is inadmissible. All responsible factors to bear the consequences’
Purcărea says this evolution is closely related to the rating decisions, as the rating agency S&P will announce on June 5 whether or not to lower Romania’s rating below the investment rating.
In terms of financing in local currency, costs have almost doubled, but the intervention of the NBR has managed to stop these increases and reach a medium level. “Until the intervention of the National Bank, the cost of financing had increased enormously from 3.8% before the crisis to 6% for Romanian lei bonds. After the intervention of the NBR, through that decision to buy bonds in lei, the cost of financing decreased to 4.7%. It is still above the level since the beginning of the crisis, but has decreased significantly, “said Mihai Purcărea.
Also read: Laura Codruța Kövesi’s first reaction after the victory at the ECHR.
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