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

"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.

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