The state borrowed nearly 1.32 billion euros yesterday, mainlyfrom banks, agreeing to pay a 4.8% interest rate on three-yearbonds.
At this price, the Finance Ministry raised more than the plannedbillion, but not as much as had been discussed at previous meetingswith potential investors.
The overall subscription demand amounted to over 2 billioneuros, but attracting a higher amount would have also meant ahigher interest rate. Out of the total of 1.319 billion euros,banks contributed 1.042 billion euros.
The auction comes amid comments made on Wednesday evening by themanaging director of the IMF, Dominique Strauss Kahn, on theprospects of five European countries of defaulting on payments,with Romania being mentioned towards the end of the list.Coincidentally, on Wednesday morning, NBR governor Mugur Isarescutalked at a seminar precisely about Romania's foreign and publicdebt, saying markets become much more anxious when public debt getsto 40% of GDP, as is the case of Romania, and that Latin Americancountries went into default with a debt of as little as 20% of GDP.Yesterday, however, he responded harshly to the head of the IMFthat Romania's foreign payments were not made by him or by theFund, but by the government and the NBR. "In my capacity asgovernor of the NBR, I want to make it very clear that there isabsolutely no danger of Romania suspending its foreign payments."At the same time, Isarescu created confusion saying it would bebest for the government bonds to be put off after banks had alreadysubmitted their offers.
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