Using an instrument designed in 2020 to help the Government mitigate the effects of the Covid-19 crisis, the National Bank of Romania (BNR) has intervened for the first time since last April on the secondary public debt market in order to "improve liquidity and remove tension" on the market, Profit.ro reported.

"We are buying government bonds. Today, BNR has been buying government bonds; I don't know if it will do the same in the coming days. The goal is to have more liquidity in the market and to reduce the tension a bit," said Dan Suciu, BNR's spokesman.

BNR has never used this instrument to make massive purchases of government bonds in the past, but the central bank's interventions at times when tensions accumulate on the market are aimed at sending a message of confidence to banks.

The Romanian Ministry of Finance performed poorly in the latest debt issues when it either rejected all banks' offers or raised only part of the target amount.

Romania's long-term interest has increased more markedly recently, driven by the risk aversion brought by the Russian aggression in Ukraine.

The 10-year local currency debt is traded on the secondary market at yields that are more than twice as high as a year ago and have reached the highest level in 9 years.

The yield of the 10-year public debt has surpassed the 6% threshold, increasing by about half a percentage point in the last week alone.

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iulian@romania-insider.com