The NBM supports the development of the Moldovan government securities market and the attraction of new international investors
This was announced by the National Bank, noting that the development of the government securities market was discussed at a meeting held at the NBM with the participation of representatives of the Ministry of Finance and the EU Project Preparation Facility. The parties present at the meeting discussed the expansion of the domestic market, the attraction of international investors and the creation of conditions for the access of government securities (GS) to foreign markets. During the meeting, EU technical assistance expert Constantinos Kyriakopoulos made a brief presentation on how the architecture of the Moldovan GS market could be improved to facilitate access for international and local investors. Various options and mechanisms for the placement of government securities were considered, including issues in national and foreign currencies. It was noted that in the current conditions, when there is a high level of liquidity and currency supply in the domestic market, the issuance of government securities in foreign currency may put additional pressure on financial stability. Accordingly, the option of issuing bonds in Moldovan lei on international markets was also discussed. Another issue of discussion was the possibility of establishing links between the Single Central Securities Depository and international central depositories such as Euroclear and Clearstream, as well as bilateral links with national depositories of other states. Both Euroclear and Clearstream provide access to the most developed capital markets in the world, while links with these institutions largely depend on the volume and attractiveness of Moldovan financial instruments. The architecture of the primary and secondary GS market was also analyzed, including the role of primary dealers, GS trading floors and the Single Central Securities Depository. It was noted that from 2023, government securities with a circulation period of more than 1 year can be admitted to trading on the exchange, respectively, transactions with government securities can be carried out both through banks of primary dealers and through non-bank brokers. In this regard, foreign experts proposed to consider the possibility of participation of non-bank brokers in auctions for the placement of government securities, along with primary dealers. The parties exchanged views on the use of omnibus accounts by the participants of the Single Central Securities Depository. Representatives of the NBM noted that the information system of the Single Central Securities Depository allows the use of omnibus accounts, which are currently applied to exchange operations. Once links are established between the Single Central Securities Depository and other custodians, omnibus accounts will be used for cross-border transactions. NBM President Octavian Armasu, who was present at the meeting, welcomed the initiative of the Ministry of Finance and EU project experts. He called it important that the issue of government securities be carried out in the national currency, otherwise there is a risk of increasing imbalances in the foreign exchange market and the domestic money market. Octavian Armasu stressed that in recent years, the National Bank of Moldova has taken all the necessary measures to ensure the stability of the domestic financial market and has succeeded in creating a technical infrastructure, both of which are reliable support for attracting foreign investors to the local market. The President of the NBM proposed the establishment of a Task Force consisting of representatives of interested institutions, which would be responsible for the coordination and implementation of this ambitious project. Head of the EU Support Group Yiannis Hadziyiannakis thanked the leadership of the NBM for its openness and noted that with the increased access of international investors to the Moldovan government securities market, there will be opportunities to identify new investors and increase the investment attractiveness of the country.// 03.06.2023 — InfoMarket.
