Romania's financing gap could stand between EUR 7.4bn and EUR 16bn in 2009, pundit deems

The country's financing need for 2009 is somewhere between 7.4 and 16 billion euros, depending on different scenarios for rollover of maturing debts, mainly from the private sector, advisor to the central lender governor, Lucian Croitoru, said.

If the financing lines of banks are renewed in full and those of companies in a ratio of 90 percent, the total financing gap stands at the range's lower limit, respectively 7.4 billion euros. But if 90 percent of the banks' debt and only 60 percent of the companies' debt is rolled over, then the financing gap hikes to 16 billion euros for 2009.

"Romania's financing need stands at 45 billion euros, with the largest part of this debt stemming from the private sector. Some 10 billion euros of the short-term external private debt belong to banks and the rest stem from companies," explained Croitoru.

Croitoru added that the negotiations with the International Monetary Fund (IMF), which were resumed today, are currently based on financing scenarios of the Romanian authorities and of the international institution, so we cannot talk yet of a certain sum solicited by Romania.

The total loan could include also funds for covering the 2010 financing gap, as the agreement would be signed on two years.

The potential sums borrowed from the IMF would go to shield Romania's currency reserve.

However, Croitoru stressed that "the IMF does not impose any restrictions related to the activity of the central lender on the foreign exchange market." He added that the parties will most probably reach an agreement regarding the level at which currency reserves should be placed at year-end.

In case of an agreement, the letter of intent as well as the memorandum containing the economic conditions Romania pledges to respect are normally written by the IMF and signed by the Romanian authorities, Croitoru explained.

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