Bloomberg<\/a> reminded.<\/p>\nEven under these conditions, the high interest rates Romania pays attract investors with a higher appetite for risk.<\/p>\n
\u201cAt current levels, the purchase is starting to become attractive,\u201d said Juan Orts, a strategist at Societe Generale SA in London. \u201cIt is the classic scenario for emerging markets: when there is excessive pessimism, and everyone is worried, that is when you buy.”<\/p>\n
The specialist pointed out that Romania \u201cdodged the bullet\u201d when Fitch Ratings maintained its BBB- rating in July. He estimated that the country will probably avoid a downgrade to the \u201cjunk\u201d category by S&P Global, as part of the review scheduled for next month.<\/p>\n
With expectations from the rating agencies somewhat clarified, investors are now focusing on developments showing a significant reduction in the budget deficit. They want to know whether the trend will be continued through the most important law for the economy in 2027, the state budget law.<\/p>\n
\u201cDomestic risks in Romania have increased since the collapse of the majority government; however, sovereign spreads have performed well,\u201d said Sheraz Hussain, portfolio manager at RBC BlueBay, an asset management firm based in London.<\/p>\n
The sovereign spread represents the interest rate difference between bonds issued by the Romanian state and those of a country considered very safe.<\/p>\n
Investors see the political risk, but are attracted by the very high interest rates Romania pays to borrow. For many traders, the potential financial gain outweighs the immediate risk, and they treat Romanian bonds as a profitable opportunity as long as fiscal reform commitments remain in place.<\/p>","protected":false},"excerpt":{"rendered":"
The cost of insuring against the risk of Romania\u2019s sovereign debt default over the next five years, through credit default swap (CDS) contracts, is by far the highest among securities issued by more than 60 countries worldwide with an \u201cinvestment-grade\u201d rating. The risk seen by investors and insurers comes even though two major credit raters, […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-12046","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts\/12046","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12046"}],"version-history":[{"count":0,"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts\/12046\/revisions"}],"wp:attachment":[{"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12046"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12046"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12046"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}