BUCHAREST, Dec 22 (Reuters) - Romania sold 405 million lei ($144 million) in 1-year treasury bills at its last 2008 debt auction on Monday, bringing the total sold to 12.4 billion lei as yields jumped because of worries about the economy.
The average accepted yield on Monday was 14.23 percent, compared with 9.29 percent in January, even though inflation declined slightly to just under 7 percent so far this year.
Earlier in the fourth quarter, the finance and economy ministry revised its 2008 issuance plans to 12.7 billion lei, from 11 billion.
It sold mostly short-term paper, with maturities ranging between 3 months and 5 years, as the global cash squeeze has pushed yields upwards.
Meanwhile, a growing need for cash to deal with a gaping budget deficit left the ministry unable to resist.
In November, a ministry official said Romania would need at least 16 billion lei next year to cover a deficit target of 2 percent of GDP.
However, fiscal plans for 2009 are unclear as the centre-left coalition that has emerged after Romania's parliamentary election has yet to clear a budget plan.
The government which is facing parliament's vote of confidence on Monday, will face tough decisions regarding public finances because electoral giveaways this year are likely to leave state coffers deep in the red.This will exacerbate threats posed by Romania's vast current account deficit, which economists say makes the European Union member one of the most vulnerable emerging markets in Europe.