Romania is still regarded by foreign investors as an investment with a low degree of risk, as the credit default swap (CDS) quotations have dropped close to 100 basis points this month, which is the minimum of the last eight years, reports local Ziarul Financiar.

CDS quotations reflect the evolution of the investors’ perception, respectively the degree of mistrust in a particular issuer. In the crisis years, it was one of the most visible indicators of a country's ability to finance itself from capital markets.

At the beginning of the economic crisis, Romania’s CDS quotation exceeded 700 basis points.

The level of CDS quotations influences the cost of external financing. If it goes down, the state can borrow at lower costs, and local banks can attract cheaper loans from parent banks. In the last year, Romania was able to borrow money from the local and foreign markets at historic low costs for some maturities.

editor@romania-insider.com