This year, the state through the Ministry of Finance has to borrow 160 billion lei, which is the amount of necessary financing. Added to this is the need to refinance cash management tools. According to the institution’s document, it will also use Samurai bonds (issued in the Japanese market).

Document required for 2023 funding and Samurai bond – click to open

The 160 billion that will be borrowed represents a budget deficit of 4.4% of GDP (approximately 68 billion lei) and the amount of debt that will be refinanced in 2023 is approximately 92 billion lei.

According to the estimates of the Ministry of Finance, the budget deficit will be financed approx. 30% from internal sources and 70% from external sources.

Samurai bonds on the foreign market in 2023

According to the Ministry of Finance, the approximate volume of loans from foreign markets is estimated at approximately 11-12 billion euros due to:

• issuance of Eurobonds, including through private placements, in the amount of 7.5-8.5

A billion euros (equivalent), depending on developments, conditions and opportunities offered by these markets, as well as the implementation of early redemption and partial exchange operations of certain series of existing Eurobonds in order to manage payment peaks in 2023-2024.

“Furthermore, depending on the financial conditions and terms associated with them, as well as the development of financial markets, other instruments may be used in foreign markets (for example, Samurai bonds) after the completion of specific milestones necessary to achieve them,” says the MoF .

• allocation of approximately 2 billion euros by the EU as part of the Recovery and Resilience Fund;

• the withdrawal of loans provided by international financial institutions in the amount of approximately 1.5 billion euros.

“By concluding external loans, the Ministry of Finance intends to reduce the risk of refinancing by extending the average duration of the remaining government bond portfolio under favorable price conditions, as well as diversifying the investment base,” the document also states.