The Ministry of Finance announced that the yields to be paid under the October scheme Fidelis of state bonds dedicated to households, launched monthly by the Ministry of Finance and traded on the Bucharest Stock Exchange, are kept at the same levels as in September. A new maturity of three years for the bonds denominated in euros was introduced to replace the 2-year maturity that previously replaced the 1-year maturity.

In September, Romanian households invested RON 2.1 billion in Fidelis government bonds, 50% more than in August, being attracted by attractive interest rates, especially for the euro issues, explained for Ziarul Financiar Dragoş Mesaroş, trading director at Goldring – one of the most active brokerage houses at the Stock Exchange. 

"People are trying to protect their savings. European and American [equity] markets are at their highest; the Romanian equity market is as well. Banks can't fight the state when it comes to deposit interest rates, plus interest income is subject to 10% tax [unlike the revenues generated by placement in state debt]. I think the ten-year euro interest rates convinced many investors," said Mesaroş.

The Treasury attached a 6.5% coupon to the 10-year bonds denominated in euros this month, 5.25% for the 5-year maturity, and 4.15% for the newly introduced 3-year maturity. 

When it comes to local currency-denominated bonds, the Treasury pays 7.2% for the 2-year maturity, 7.6% for 3-year bonds, and 7.9% for 6-year bonds. 

Romanian banks do not offer local currency deposits with a maturity above 2 years, according to the National Bank of Romania. For the 2-year maturity, for instance, BCR pays 3.8% interest – subject to 10% income tax, resulting in a net gain of some 3.4% – roughly half the 7.2% paid by the Treasury.

iulian@romania-insider.com

(Photo source: Facebook/Bursa de Valori Bucuresti)