The Republic of Moldova must identify new financing opportunities, while the issuance of Eurobonds will ensure long-term investments in the country’s infrastructure, said the executive director of the Independent Think Tank “Expert-Grup” Adrian Lupușor. The economist explained that the issuance of Eurobonds will contribute to the country’s economic growth and to the enhancement of citizens’ welfare, IPN reports.
According to the executive director of “Expert-Grup”, the Republic of Moldova is one of the countries that do not issue Eurobonds and this absence on the international financial markets limits the state’s visibility in investment circles, but the Eurobond is a financial instrument with which the government borrows money from international capital markets.
“This means that the Government of a country issues Eurobonds that are purchased by investors from international stock exchanges. This money usually circulates long, for 7-10 years. It enters the economy and turns into different infrastructure projects. As a rule, these Eurobonds are issued at competitive interest rates that are smaller than those on the internal market. The Eurobonds are issued in foreign currency and this implies particular currency exchange risks. The countries from the region, such as Ukraine, Armenia and Tajikistan, which are not very far from us, already issued Eurobonds to develop as the advantage is that money is brought to the economy for a longer period of time and can be invested in major projects,” Adrian Lupușor stated in the program “Public Space” on Radio Moldova channel.
According to the expert, the issuance of Eurobonds will stimulate the private sector and will attract more investments to the economy.
“The Eurobond paves the way for the capital market’s development. When a country issues Eurobonds and this way enters the international capital markets, the private companies are enabled to enter the capital market. This way, the state can help the private sector to enter the international capital market and this will bring more investments to the economy. We all know how important the investments are for economic growth and welfare,” said Adrian Lupușor.
A study conducted by “Expert-Grup” shows that the most recent and relevant issues of Eurobonds were made in January 2020 by Romania (€1.4bn for 12 years with a return of 2.025% and €1.6 billion for 30 years with a return of 3.375%) and by Ukraine (€1.2bn for 10 years with a return of 4.375%).