Loading ...The Romanian short-term foreign debt reached an all-time record of 18.43 billion euros at end September, following a slight decrease in Q3, thus interrupting the three-year constant growth, with the total foreign debt exceeding 70 billion euros, the Ziarul Financiar daily reads on November 27.
The banks and private companies have taken in most of the short-term foreign loans accounting to some 98.7%.
The banks and private companies have taken in most of the short-term foreign loans accounting to some 98.7%.
The rally in the short-term debt was mainly influenced by the increased number of funds drawn by the local banks on short term (periods smaller than one year), up by 1 billion euros to 8.8 billion euros. While the banks attracted larger amounts, the companies reported a slight decrease against June, from 9.6 billion to 9.37 billion euros.
Lucian Anghel, Romanian Commercial Bank (BCR) chief economist said the increase demonstrated the high foreign currency financing needs of the Romanian economy. Rises will continue, but the growth pace is still to be determined, he added. “It should decrease, as the growth pace of foreign loans will also slow down”, the BCR official said.
The high foreign debt is considered by the external analysts as one of the risk factors of the Romanian economy, together with the current account deficit, with the boom of the short-term loans being the major concern, as they represent some 70% of the foreign currency reserves of the National Bank of Romania (BNR).
The short-term foreign debt has reported a rapid growth since 2005. While the balance amounted to 2.7 billion euros at the end of 2004, it had grown fourfold by December 2006, to 10.9 billion euros.
The short-term foreign debt has reported a rapid growth since 2005. While the balance amounted to 2.7 billion euros at the end of 2004, it had grown fourfold by December 2006, to 10.9 billion euros.
The previous historical record was achieved this March, when the short-term foreign loans totaled some 18.22 billion euros.
In addition to the increase of short-term financing, the banks have borrowed more money and on longer terms, with the balance of such debts exceeding 10 billion euros. Moreover, the medium and long-term deposits attracted by the local banks from non-residents have slightly hiked, reaching a new high of 5.97 billion euros.
In addition to the increase of short-term financing, the banks have borrowed more money and on longer terms, with the balance of such debts exceeding 10 billion euros. Moreover, the medium and long-term deposits attracted by the local banks from non-residents have slightly hiked, reaching a new high of 5.97 billion euros.
Such deposits represent a method for the banks to attract investments from their shareholders, analysts say.
The state has borrowed less from the foreign markets and the public debt posted an insignificant rise to 10.2 billion euros, with its share in the total debt continuing to fall to 14.5%.
The state has borrowed less from the foreign markets and the public debt posted an insignificant rise to 10.2 billion euros, with its share in the total debt continuing to fall to 14.5%.
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