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•Romania’s total external debt reduced in 2013 by EUR 3.2bn to EUR 96.4bn, with both short-term and medium-term debt contributing to this adjustment. As percentage of GDP, the debt reduced to 67% after the peaks of 75% reached in 2011-2012. 

•After increasing during the first two trading sessions of last week, the short-term money market interest rates relaxed by the end of the week in the context of the end of the minimum reserve requirement period. The interest rates for tenors longer than one month increased by around 10-14bps. 

•The Ministry of Public Finance rejected the bids for the 12M T-bills auction held last week, the amount subscribed being lower than the amount planned to be raised: RON 0.7bn vs. RON 1.2bn, while the secondary market treasury securities yields were on an upwards trend. However the MPF raised the amount planned of EUR 0.2bn through EUR-denominated T-bonds maturing in 2019 at an average yield of 3.3%, slightly above the one accepted at the previous auction with similar tenor (3.18%).

•After two quiet trading sessions at the beginning of last week, the RON started to depreciate, negatively influenced by the exacerbation of political turmoil in Ukraine and the increase of political noise within Romanian coalition government. Thus, the EUR/RON increased from around 4.4825 to a high of 4.5255 on Thursday. 

•The EUR/USD traded in a range of 1.3685 – 1.3773 last week, influenced by data releases in US and euro area.

Florentina Cozmâncă
Senior Economist
The Royal Bank of Scotland plc, Edinburgh, Romania Branch