January 29, 2019 / 1:57 PM / 7 months ago

Romanian government can cover financing needs - report

BUCHAREST, Jan 29 (Reuters) - Romania’s government can cover six months worth of funding needs and will not issue debt at unreasonably high yields, Finance Minister Eugen Teodorovici was quoted saying on Tuesday.

Debt managers rejected all bids at a tender to sell 2031 bonds on Monday and it has been a struggle to sell the planned amount at auctions throughout January.

The government introduced a slew of taxes via emergency decree in late December without an impact assessment or public debate, including a levy on banks’ financial assets tied to money market interest rates.

The tax and fiscal uncertainty have hit Romanian asset prices, with the leu currency touching record lows this month and 10-year debt yields hovering near their highest levels since July.

“Yesterday I gave the order to not borrow from the market,” Finance Minister Eugen Teodorovici was quoted saying by state news agency Agerpres.

“As you know well, we have the funding needs covered for a very long time, at least six months.”

“We cannot buy at a price that someone in the market is trying to raise higher than necessary or than it should be. And so, the finance ministry’s decision is to not borrow and that was yesterday’s decision.”

The Social Democrat government has yet to present a budget plan for 2019, with a draft expected later this week. (Reporting by Luiza Ilie, editing by Ed Osmond)

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