Private companies increased their medium and long term foreign debt by another 700 million euros in October, around 120 million euros more than in September, with total credits being worth over 21 billion euros. The volume of the debt is therefore 46% higher than a year ago. At the same time, sums paid ten months into the year on the foreign debt climbed to almost 4.3 billion euros, 57% more in euros against the same time last year. The value of due instalments and of interest rates increased even more for companies who generate revenues mainly in RON, and which were not covered against the risk of depreciation of the national currency. The debt service accounts for 20% of the volume of credits attracted, compared with 18.9% a year ago. The private foreign debt is the main driver of Romania's public debt, which climbed to almost 35 billion euros, over 30% more than the level recorded in October 2006. The increase in the foreign debt enhances the vulnerability of companies to unfavourable exchange rate moves, with the fast depreciation of the RON this autumn being a lesson for entrepreneurs who accumulated debt in foreign currency.
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