Mugur Isărescu / We do not exclude a loan with the IMF
Romania's private debt due in 2009 reaches 24 billion euros, 17.5 billion of which will be renewed, according to a study of NBR. The remaining 6.5 billion will be paid. The Romanian government also takes into account a financing package from the European institutions and from the IMF.
90% of the external debt due in 2009 will be renewed by the parent banks, Isarescu says.
The private non-banking sector, companies, leasing companies and non-banking financial institutions, could face no funding this year, given that only 60% of the private non-bank debt due this year will be refinanced, the Governor of the National Bank of Romania (NBR), Mugur Isărescu, announced. He explained that, from the total debt of 24 billion euros due this year, 12 billions are from NBFIs, corporations and leasing companies. In exchange, from the 10 billion euros debt in the banking sector, 90% will be refinanced. Isarescu showed that there is great focus on the debts of the banks, with the first ten banks having about 90% of the amount in their portfolio. "If you ask Cinteza (Head of the NBR Surveillance Directorate) he would probably be sure that more than 90% would be renewed, if one takes into account the effort of the capitalization of the banks", the NBR governor said. However, the level of concentration is much lower on the private foreign non-bank debt. The first ten big companies have no more than 20% of the external debt in 2009, while the first five-six leasing companies have loans worth about two billion euros. "If we take the first nine big corporations, such as Renault Romania or Petrom, and place the five or six leasing companies on the tenth place, we reach a maximum of 30%", the NBR Governor pointed out.
"We have a financing deficit in the public sector and we can think of compensation as in the case of communicating vessels", explained Governor Mugur Isărescu. He added that the state will not have financing problems this year and it could borrow more than it is necessary, which can reach 2-3 billion or even 4 billion euros. The Governor explained that, in his opinion, the authorities could borrow more than the amounts that result from the debts and public finance deficit, just to cover the gap resulting from the private sector. He also stated that a possible agreement with the International Monetary Fund (IMF) should be included in a package of agreements with the European institutions. He noted that a loan from the IMF is a swap operation that should protect the currency reserves that can be found in the economy only after the "interventions" of the NBR. The decision should have been taken with the Government. We are considering packages, one of them has European sources, I mean institutions like the European Bank for Investments. A more complete package can include the financing from the IMF", Isarescu said. For Romania, in case of an agreement with the IMF, the "seal" that shows that "we will have an appropriate behavior" is more important than the amount received, said the Director of the Audit Department of the National Bank of Romania, Eugen Radulescu. In the same time, Rădulescu emphasized that there was no state to ask for the help of the European Union that didn't go to the IMF in the same time. "Probably, one of the IMF conditions will be to freeze the salaries in the public sector until the end of the year", said Radulescu.
The NBR cannot promise a certain exchange rate. "We do not engage any specific exchange rate. The changes in the rates must be correlated to certain other economical indicators. We do not target the exchange rate, but we are not uninterested in it either", said Isarescu. He said that all the operations of the NBR aim certain monetary adjustments. The Governor has stated also that the national currency would not depreciate if there were a lack in liquidity in the market. He showed that a lack in liquidity is a normal thing at this moment. "If they wait for the level of 4.7 lei/euro, what should we do? They should figure their choice out by themselves", Isarescu said.
• Transalated by Sorin Bălan