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Romanian bonds yields record the biggest fall compared to Hungary, Poland after Brexit vote

The yields of Romanian bonds have been following a downward trend since the beginning of the year, with slight oscillations post-Brexit and currently have the largest decline than Hungary and Poland, compared to the time before the UK referendum, Secretary of State with the Public Finance Ministry Enache Jiru said on Friday in a press conference.

“After the referendum day (ed. note 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 explained.

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 that is a time when “the liquidities are resettling by regions.”

In this context, he mentioned to exemplify the yield of Romanian 11-year bonds, 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.

Jiru 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).


About Anca Bernovici