The effect of the CCR decision. Nazare: Romania's bonds became cheaper immediately after the verdict on special pensions
The Minister of Finance, Alexandru Nazare, stated on Thursday that, following the CCR's decision regarding the reform of special pensions, Romania's 10-year bonds adjusted by approximately 10 basis points in a single day, which means that we can borrow more cheaply.
The interest rates at which Romania borrows have decreased. Archive photo
“Each right step taken means more confidence from the markets and lower financing costs for Romania. After yesterday's decision of the CCR on the reform of special pensions — an essential reform, also requested by the EU for accessing PNRR funds — Romania's 10-year bonds adjusted by about 10 basis points in a single day and are about 40 basis points below the level at the beginning of the year.
The interest rate at which Romania borrows dropped to approximately 6.4% per year, the lowest level in the last 2 years. The decrease in interest on loans will come gradually, but the fact that the state borrows cheaper is a necessary first step.
And the consistency of the reforms will be seen directly in the budget as well, through lower long-term interest expenses — that is, more money for investment and development.”said the minister.
“The trust of the rating agencies is not only a technical matter”
Previously, the Minister of Finance had stated that the trust of the rating agencies is not only a technical matter, but it reflects the seriousness of public policies, the predictability of decisions and the state's ability to respect its commitments.
He participated on Thursday, together with Prime Minister Ilie Bolojan and other representatives of the Government, in the meeting with representatives of the rating agency Moody's, as part of the periodic evaluation of Romania's economy.
“Romania's financial stability is built through responsible decisions, constant dialogue and international credibility. (…) For the Ministry of Finance, these discussions are essential: the country rating influences the costs at which the state borrows, the level of investments and, implicitly, the economic stability felt by every Romanian. I presented them with the progress made in the digitalization of the tax administration and the measures that will improve revenue collection, as well as the budget consolidation directions we are following. The objective is clear: reducing the budget deficit, while maintaining investments and support for the development of the economy.
The trust of rating agencies is not only a technical matter – it reflects the seriousness of public policies, the predictability of decisions and the state's ability to respect its commitments“, the minister wrote, on Thursday, on his Facebook page.
He emphasized that a credible economy means lower interest rates, more investments and better prospects for Romania.
“We will continue this transparent and professional dialogue, because financial stability and the trust of international partners are fundamental for economic growth sustainable and for the well-being of Romanians“, pointed out Alexandru Nazare.
