Foreigners bet on RON appreciation

The National Bank of Romania considers that the sale by the Finance Ministry of treasury certificates in RON with maturity over one month and over six months has attracted the interest of the investors, points out HotNews, quoting Reuters. The Finance Ministry sold titles with a maturity of one month worth RON two bln, with a yield of 6.04 per cent per year, and titles with six-months maturity for RON 500 M, with an average interest rate of 6.28 per cent per year. Both issues were subscribed four and even eight times, showing the great interest of the investors, both local, but chiefly foreign, who sold foreign currency in order to invest RON, betting once again on the potential of appreciation of the national currency, reads Ziarul Financiar. “There was a huge interest for these treasure certificates, because of the absence of Romania from this market. The minimum interest rate was around five per cent, which shows how eager the investors are to invest their money,” declared Ionut Dumitru, senior analyst with Raiffeisen Bank Romania, quoted by HotNews.

“The oversubscription of the issue shows the confidence of the foreign investors in the Romanian economy. Among the buyers there are of course pension funds and mutual funds,” believes Melania Hancila, analyst Finansbank. The Finance Ministry has planned for this year auctions of state certificates on the domestic market with a value of RON eight bln, of which RON 5.7 bln in the first quarter. The next auctions of state certificates are due on January 15, February 1, February 12, March 1 and March 12. The Ministry announced at the end of 2006 that the total volume of the loans that could be launched through issues of state certificates on the domestic market this year is RON eight bln, in the form of treasury certificates and state bonds of the benchmark type. In 2006, the Finance Ministry planned exclusively loans on the domestic market, with a maximum value of RON 4.15 bln. All the issues were cancelled in the conditions in which the state budget registered an excess each month. The Finance Ministry announced that this year it intends to launch an issue of Eurobonds - the first since 2003 - worth EUR 500 M, subject to market conditions. As of September 1, the foreign investors may buy freely also short term instruments, namely treasury certificates, concurrently with the full liberalization of the capital account.

Source: nineoclock.ro