The European Union state has become a fixture on foreign markets, borrowing both euros and dollars four times this year, the latest in September.
"These days, an issuer has much shorter windows of opportunity which require flexibility," treasury chief Stefan Nanu told Reuters in an interview.
Romania has sold roughly 8 billion euros ($7.80 billion) out of a foreign debt target of 10 billion euros for this year. Nanu said he did not rule out another issue pending market conditions, although the ministry's hard currency funding buffer was high enough to enable the treasury to do without it.
Next year, debt managers will rely on EU recovery funds and low-interest loans from international financial institutions to reduce their foreign issuance target to 7-8 billion euros or even lower if the domestic retail market kept up its growth pace and the share of foreigners holding domestic debt rose.
"The Eurobond target is the variable, depending on whether opportunities on other funding instruments materialize," Nanu said. "The idea is to lower the supply a little to reduce the pressure on credit spreads, which are inflated by high supply, not justified by the credit risk fundamentals outlook."
Fitch Ratings, Moody's and S&P Global Ratings have Romania on their lowest investment grade. Analysts expect economic growth to slow down from 4.5% this year to 2.7% in 2023.
Romania's gross funding needs for 2023 stand at 142.6 billion lei ($28.18 billion), or roughly 9.4% of gross domestic product, Nanu said, down from 146 billion lei this year.
The government will target a consolidated budget deficit of 4.4% of GDP from this year's estimated 5.8%, which in nominal terms means net issuance will fall some 13 billion lei ($2.57 billion).
"The fiscal adjustment is key to take pressure off yield curves," said Nanu ahead of meeting investors next week.
On the domestic market, Nanu said retail bond buyers exceeded expectations to account for about a fifth of domestic funding. He also expected the share of foreigners' holdings of domestic debt to rise from 16% at the end of July, as the central bank kept up the pace of interest rate tightening this month.
Nanu also said the ministry was open to private placements through its medium term notes (MTN) programme, to diversify its investor base, and was considering yen or yuan deals.
"We are not ruling out any discussions. We have told our MTN dealers we can talk private placements on a case by case basis depending on sizing and pricing."
Nanu also said the ministry was working with the World Bank to finalise a framework for green bonds next year.
($1 = 1.0263 euros)
($1 = 5.0605 lei)
(Reporting by Luiza Ilie in Bucharest; Editing by David Gregorio)
By Luiza Ilie
