Large part of government debt owed to NBM will be converted into state securities

In the course of the first quarter of this year, the National Bank of Moldova (NBM) and the Ministry of Finance will convert government debt worth 1.81 billion lei owed to the central bank, Info-Prim Neo reports. According to the Government’s Strategy on the development of the financial sector covering the period 2005-2010, the NBM will work together with the Ministry of Finance with a view to gradually reducing internal government debt. As of December 31, government debt owed to the central bank was roughly 2.33 billion lei, composed of public borrowings from the NBM and debt represented by state securities in the NBM portfolio in the amount of 400 million lei (valued at purchase price). In September 2007 the NBM and the Ministry of Finance singed a plan on government debt conversion into state securities. Following partial debt repayment by the Ministry of Finance in accordance with the 2007 State Budget Law, government debt owed to the NBM as of late 2007 diminished by 160 million lei, or by 6.4 percent year on year. Last year, the Ministry of Finance placed with the NBM term deposits in national currency in the amount of 898 million lei for terms ranging from 1 month to 1 year, in accordance with an agreement signed by the NBM and MoF at the end f 2006. The average weighted interest rate on deposits placed throughout 2007 was 11.83 percent. On 31 December 2007, the balance of deposits was 367 million lei. The average interest rate on the deposits in the balance account was 15 percent, while the average term of the deposits 301 days.