The rate-cutting trend will resume this autumn, according to the Ministry of Public Finances, which is betting on a "genuine" consolidation of the three-year T-bills on the market, although they have been snubbed lately.
Yields climbed to 13.9% during the latest auction, up from the 12.5% offered for the first issue, launched this March.
"The 18% yield offered by the National Bank of Romania (NBR) was incredibly appealing, but, as soon as the central bank points to a rate cutting trend again, the market will turn to longer and more profitable maturities," says Enache Jiru, head of the State Treasury.
The market has been taking its cue from the NBR in the past few months, focusing on shorter maturities (one-three months), which the Finance Ministry also had to accept.
The NBR is now pointing to "stationary" yields, until the inflation cut trend consolidates.
Annualised inflation amounted to 14.4% in the first five months. According to Jiru, the foreign currency gained from the eurobond issue will be sold in accordance with a gradual programme, which should pose no difficulties to the central bank.
Although plans devised at the beginning of the year did not match the market trends, the pressure born by the Ministry in the last three months in the attempt to put a lid on rates did not upset whole-year calculations.
The Ministry of Public Finances is not worried about the central bank's plans to issue certificates of deposit. "This would be an instrument able to attract the liquidity surplus the NBR is now rolling from one month to another," Jiru stated. razvan.voican@zf.ro
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