Political Instability May Cost Romania EUR1 Million A Day Because Of Higher Interest Rates

07.06.2012 By Claudia Medrega

The persistence of political turmoil affects Romania’s perception by foreign investors and may lead to higher borrowing costs, which in turn will have a significant impact on the spending on the public debt interests and negatively influence the private sector, too. The domestic currency continued to depreciate on Thursday, and came close to 4.49 lei to one euro on the interbank market, while the government bonds yield went up towards 6%, because of political uncertainty and the attempt to remove President Traian Basescu from office.

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Keywords:
POLITICS
, GOVERNMENT BONDS
, CDS
, TREASURY