Romania Sells 1.423 Bln Euro in 1-Yr T-bills at 4.25% Yield

Dealers placed bids for a total of 1.76 billion euro worth of government securities in the auction, BNR, which sells government securities on behalf of the Finance Ministry, said in a statement.

This is Romania's third auction of foreign currency-denominated securities this year. In August the country sold 447 million euro in four-year T-notes at a 5.25% yield, and in early November it sold 794 million euro in three-year T-notes at the same yield.

Romania has turned to the domestic market for funding as its nine-month budget deficit widened to 5.1% of the gross domestic product (GDP) projected for the current year, from 1.5% of GDP in the same period last year. The country's government collapsed in October following a no-confidence vote, and concerns over political instability have prompted investors to demand higher yields for lei-denominated securities.

Romania signed a 20 billion euro aid deal with the IMF, the European Union and the World Bank earlier this year to support its crisis-hit economy. An IMF mission wrapped up a two-week review of Romania's economic performances under the stand-by agreement earlier this month, saying it will delay the third loan tranche under the agreement until the political situation stabilises.

The country's finance ministry said earlier this week it planned to issue 6.0 billion lei ($2.1 billion/1.4 billion euro) worth of government securities in November to finance and re-finance public debt.

Romania has sold 52.71 billion lei in government debt paper so far this year. It sold government securities worth nearly 12 billion lei last year, up from 8.7 billion lei in 2007.

(1 euro = 4.2792 Romanian lei)