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Romanian Pvt Pension Funds Lack Enough Liquidity For Long-Term Investments

Private pension funds in Romania don’t have enough liquidity yet to invest in long-term treasuries and prefer short-term investments, Bogdan Dragoi, state secretary with the Finance Ministry, said Tuesday.
Romanian Pvt Pension Funds Lack Enough Liquidity For Long-Term Investments
02 mart. 2010, 11:46, English

„The problem is pension funds don’t have so much money to invest. If we consider the monthly average is at about EUR20 million, of which 65% may be invested in state treasuries, we’re still talking about small change. We don’t want non-liquid bond issues because their price on the secondary market wouldn’t be real and would send wrong signals,” Dragoi said during the Mediafax Talks about Private Pensions conference.

He said a new issue of ten-year state bonds entails a volume of at least 400 million lei, which is about EUR100 million (EUR1=RON4.1054).

„Pension funds prefer to invest in short-term treasuries, where yields are higher,” Dragoi said.

He also said pension funds said in a quarterly meeting that took place last week they planned to invest some RON150 million on the long term. The Finance Ministry currently plans to reopen a ten-year bond issue that has a residual maturity of seven years.