The increase in the country’s public debt was driven by positive net financing on the primary government bond market amounting to 5,767.43 million lei, as well as positive net financing resulting from the direct placement of government bonds amongst private individuals amounting to 440.21 million lei.
Experts have described the situation unfolding in the domestic borrowing market as “strange”:
‘Overall, at the two sales auctions held in August, the Ministry of Finance offered government bonds worth 6.1 billion lei for placement. Demand for government bonds was similar – 6.1 billion lei. However, government bonds worth only 4.6 billion lei were sold. The Ministry of Finance simply cut off part of the demand – evidently that offering higher yields – so as not to increase the cost of servicing expensive securities in the future. As a result, debt securities worth just 1.5 billion lei were not sold,” explained Vladimir Golovatyuk.
Borrowing on the domestic market is significantly more expensive for the state. However, the budget deficit ‘cannot wait long’ for cheap external financing, yet borrowing on the domestic market is approached with caution.
Between January and August 2026, the weighted average interest rate on government securities traded on the domestic market stood at 9.56 per cent, whilst the rate on external loans does not exceed 2.36 per cent per annum.
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