The Republic of Moldova must identify new financing opportunities, and the issuance of Eurobonds will ensure long-term investments in the country’s infrastructure, according to Adrian Lupușor, the Executive Director of Expert-Grup. The economist explained that issuing Eurobonds will contribute to the country’s economic growth and the well-being of its citizens, as reported by ipn.md.
According to Lupușor, the Executive Director of Expert-Grup, the Republic of Moldova is one of the countries that does not issue Eurobonds, and this absence from the international financial markets limits the country’s visibility among investors. Eurobonds are financial instruments through which governments borrow from international capital markets.
“This means that a country’s government issues these Eurobonds, which are purchased by investors on international exchanges. Typically, these funds are long-term, with maturities of 7-10 years, and they enter the economy and transform into various infrastructure projects. Usually, Eurobonds are issued at competitive interest rates, lower than those in the domestic market. Eurobonds are issued in foreign currency, which also implies exchange rate risks. Countries in the region, such as Ukraine, Armenia, and Tajikistan, which are not far from us in terms of development, have already issued Eurobonds because the advantage is to bring long-term funds into the economy that can be invested in major projects,” stated Adrian Lupușor on the “Spațiul Public” radio show.
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According to the expert, issuing Eurobonds will boost the private sector and attract more investments into the economy.
“Eurobonds pave the way for the development of the capital market. Once a country issues Eurobonds and accesses international capital markets, it paves the way for private companies to enter the capital market as well. This means that the state can also help the private sector enter the international capital market, which will bring more investments into the economy. We all know how important investments are for economic growth and prosperity,” added the Executive Director of Expert-Grup.
According to a study conducted by Expert-Grup, the most recent and relevant Eurobond issuances were carried out in January 2020 by Romania (€1.4 billion for 12 years, with a yield of 2.025%, and €1.6 billion for 30 years, with a yield of 3.375%) and Ukraine (€1.2 billion for 10 years, with a yield of 4.375%).