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October 31, 2020

Finance Ministry’s Jiru: Post-Brexit fall of Romanian securities’ yields steeper than for Hungary, Poland

The yields of Romanian securities have been following a downward trend since the beginning of the year, with slight oscillations in the Brexit slipstream, and are now seeing the steepest decline from the time before the UK referendum, Secretary of State with the Public Finance Ministry Enache Jiru said on Friday.

“The yields of Romanian securities had been declining steadily since the beginning of the year for all maturities, until short before the Brexit vote. After the referendum day [of June 23], for 4 – 5 days all security markets saw an upward correction, including Poland, the Czech Republic or Hungary. The yields of Romanian securities too advanced 10 – 15 bps (0.1 to 0.15 percentage points),” Jiru told a specialist conference.

In his opinion, the evolution of Romanian security yields, but also of the benchmark yields, was indisputably determined by the central banks’ policies.

According to the Secretary of State, the decrease in the yields would have occurred anyway, even without the Brexit, because of liquidities’ resettling by regions.

Jiru cited the example of the yield of Romanian 11-year securities, which was 4 percent before the Brexit, gained 10 to 15 bps after the day of the vote, and is now 3.15 percent per annum, which accounts stands for a decrease by almost 25 percent (85 bps) from the pre-Brexit level.

“Ours is the steepest drop in yields compared with Hungary and Poland,” said the Finance Ministry official, according to Agerpres.

He added that the investors’ appetite for Romanian securities stays on, given that this Thursday the Ministry auctioned off the securities for a lesser yield than in the previous session.

In connection with the evolution of the Bucharest Stock Exchange, Enache Jiru said that it registered growth after the Brexit, and the BET index that reflects the evolution of the 10 most liquid issuers keeps an advance of 8.77 percent from June 22 (the day before the vote), in an evolution that is common for all the markets in the region.

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