Tuesday, December 29, 2009

Romania sells 786 mln lei in 6-month T-Bills

BUCHAREST, Dec 28 (Reuters) - Romania sold a more than planned 786 million lei ($270 million) of 6-month treasury bills on Monday at the finance ministry's 10 percent cutoff yield, which analysts say could lower early next year. 

The ministry has struggled to stick to issuance plans this year, as prolonged economic and political crises have put upward pressure on yields and stalled foreign aid, but analysts say yields could fall early next year as turmoil comes to an end.

A mission from the International Monetary Fund, which put Romania's 20 billion euro aid package on hold last month, will return to Bucharest on Jan. 21 to resume aid talks, the senate's speaker said.

The finance ministry, which had planned to sell 500 million lei on Monday had said it would not go above a 10 percent yield for leu debt, which is well above government borrowing levels seen in the euro zone or Romania's better-off regional peers.

"Over the next quarter ... there is some optimism as the IMF is expected to deliver its aid tranche and the central bank to cut interest rates," said ING Bank economist Vlad Muscalu.
"Yields could likely stay at 10 percent in January, but starting with the second half of February we could see a lower yield."

Monday's tender, the ministry's last this year, puts 2009 local currency issuance at 64.6 billion lei, five times more than last year as the government struggled to plug a yawning budget deficit targeted at 7.3 percent of GDP.

Romania also sold 2.7 billion euros on the local market this year.

On Monday, the ministry said it plans to issue debt worth 10 billion-12 billion lei ($3.4-4.1 billion) on the local market in the first quarter of 2010, down from 20.2 billion lei in the same period of 2009.

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