The reduction of the internal state debt is due to the dynamics of servicing the government’s obligations to repurchase previously issued securities. In June, the emission amounted to 4.3 billion lei – the largest volume since the beginning of the year, while SS for 4.6 billion lei were repurchased. Moreover, previously issued SS were repurchased with a lower yield than the yield on those state securities that were newly issued.
“This will lead to an increase in state budget expenditures on servicing the domestic debt. And there will be nothing left to finance budget expenditures, because the interest on the new government securities will have to be paid anyway. So we come to a paradoxical situation, when the end does not justify the means. And the benefit of reducing the domestic government debt is ephemeral,” said economist Volodymyr Golovatyuk.
However, the internal state debt increased by 4.5 billion lei in nominal value compared to the beginning of the year. The change occurred due to the increase in the issuance of SS on the primary market by 4,579.4 million lei at nominal value, as well as the issuance of SS through the electronic platform eVMS.md – by 382.6 million lei and the redemption of converted SS – by 443.4 million lei, the Finance Ministry said. In the first six months of 2025, the weighted average interest rate on SS traded at auctions amounted to 8.90%, up by 3.94 p.p. compared to 2024.
