Gov’t borrows more money from the banking market to cover the increasing expenditures: RON 275m on Monday

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The Government has tried on Monday to borrow over RON 420 million from the banking market and has managed to borrow effectively RON 275 million, according to data from the National Bank of Romania (BNR). The amounts that the state attracts through the domestic issues of bonds are increasing, which has led to the increase of the amounts which, in their turn, the banks borrow from the BNR, capital.ro informs.

This year only, the Romanian state has anticipated borrowing about EUR 15 billion, but the way things have evolved so far shows that the estimate was too optimistic.

The state is forced to borrow more money because of the increasing differences between the budget revenues and expenditures, which also distorts the banking market. The credit institutions also borrow more money.

Last week, the National Bank of Romania introduced in the banking system RON 12.2 billion through a special size operation that has not been reached since 2012, the same source informs.

These are repo loans, through which the BNR introduces liquidity into the system, generally with the aim of decreasing or keeping interest rates at a reasonable level.

Actually, the banks deposit Government bonds to the BNR, and receive, in turn, RON.

 

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