Pillar II ends October with an average gain of 402 lei per participant

Yields on leu-denominated government securities fell on the last day of the month as well, and pension funds ended October with a gain of around 3.44 billion lei on these securities. Dealers demanded nearly three times the offered amount for the 2033 bonds.

Pillar II funds ended October with a gain of around 3.44 billion lei on leu-denominated government securities, or an average of 402 lei per participant, BURSA estimates based on the National Bank of Romania (BNR) fixing from September 30, the last business day of last month, and from Friday, October 30. On Friday, the funds gained around 147 million lei, an average of 17.25 lei per participant, as yields on Romanian government securities fell across all five maturities of the fixing, according to BURSA's calculation. Each participant holds a different amount in their account, and therefore records a different gain. The figures show the price change of the securities in the funds' portfolios, not cash collected by participants or the total return of the funds. The price of a government security rises when the yield demanded by buyers falls, and BURSA explained the mechanism in the article ”Why Pillar II funds gain when interest rates on government securities fall”.

Pillar II assets stood at 243.45 billion lei on August 31, 2026, of which 155.33 billion lei were in government securities, according to the Financial Supervisory Authority (ASF). The October gain represents around 1.4% of the funds' assets and around 2.2% of the value of the government securities they hold, according to BURSA's calculation.

The BNR fixing at 12:00 shows, on the buying side (BID), decreases from Thursday to Friday: from 6.44% to 6.36% at six months, from 6.52% to 6.45% at 12 months, from 6.70% to 6.69% at three years, from 6.88% to 6.85% at five years, and from 7.18% to 7.16% at ten years. The decreases of 0.01 points at three years and 0.02 points at ten years fall within normal day-to-day variation.

NN gains nearly 50 million lei in a single day

Of Friday's gain, NN accounts for around 49.5 million lei, AZT Viitorul Tău around 29.3 million (estimate), Metropolitan Life around 24.2 million, Vital around 13.4 million, Aripi around 12.8 million, BCR around 10.6 million, and Pensia Noastră around 7.5 million lei, BURSA's calculation shows.

Three-year yield drops by 0.70 points in one month

From September 30 through Friday, the bid quote of the BNR fixing dropped by 0.42 points at six months, from 6.78% to 6.36%, by 0.44 points at 12 months, from 6.89% to 6.45%, by 0.70 points at three years, from 7.39% to 6.69%, by 0.64 points at five years, from 7.49% to 6.85%, and by 0.49 points at ten years, from 7.65% to 7.16%.

Of the approximate monthly gain, NN accounts for around 1.19 billion lei, AZT Viitorul Tău around 685 million (estimate), Metropolitan Life around 541 million, Aripi around 308 million, Vital around 299 million, BCR around 244 million, and Pensia Noastră around 171 million lei, BURSA's estimate shows. BURSA based its calculation on the holdings lists from June 30, 2026 (NN, BCR, Aripi, Pensia Noastră) and May 31, 2026 (Metropolitan Life, Vital), with an estimate for AZT Viitorul Tău, and directly compared the September 30 fixing with that of October 30; the calculation does not include collected coupons, purchases and sales made by the funds after the dates of the lists, euro- and dollar-denominated securities, or equities.

Nearly triple demand for the 2033 bonds

On Friday, in the supplementary non-competitive tender sessions, the Ministry of Finance (MF) sold 113.9 million lei of bonds maturing on July 27, 2033 (ROPG9LZUB0O2), against primary dealers' bids of 323.9 million lei, and 107.3 million lei of bonds maturing on July 27, 2031 (ROOFOYB15203), against bids of 130 million lei, according to official statements from the BNR and the MF. Demand for the 2033 bonds was 2.8 times higher than the offered amount, while demand for the 2031 bonds was 1.2 times higher, according to BURSA's calculation based on the statements. The BNR released the statements on Friday, after the 12:00 fixing.

In Friday's sessions, dealers paid the average price from Thursday's auctions: 102.8470% of face value for the 2033 bonds and 103.4611% for the 2031 bonds, prices corresponding to yields of 6.95% and 6.76%, respectively, the BNR and MF statements show. Including the supplementary sessions, the MF sold a face value of 1.695 billion lei across the two series and raised 1.783 billion lei, including accrued interest, according to the official BNR and MF statements. BURSA reported on Thursday the auction results.

The 6.95% yield on the 2033 bonds is 0.01 points lower than Friday's bid quote of 6.96%, interpolated by BURSA between the five- and ten-year maturities of the BNR fixing. The 6.76% yield on the 2031 bonds stands 0.07 points below the 6.83% bid quote, interpolated between the three- and five-year maturities.

The NN, Vital, Pensia Noastră, BCR, and Aripi funds held 2.74 billion lei in the 2031 bonds, while the six funds that publish their holdings lists held 3.81 billion lei in the 2033 bonds, according to the latest lists published by the funds. On Friday, the funds gained around 8 million lei on these two series, according to BURSA's calculation.

What could explain the drop in short-term yields

The decline in the BNR fixing was once again concentrated at short maturities: 0.08 points at six months and 0.07 points at 12 months, following 0.07 and 0.05 points on Thursday.

On Thursday afternoon, after the BNR fixing, the European Central Bank (ECB) left its three key interest rates unchanged, with the deposit facility rate at 2.50%, according to the ECB press release. Reuters had anticipated that rates would be kept on hold, BURSA reported on Thursday morning. In the release, the ECB flags upside risks to inflation stemming from higher energy prices. In BURSA's interpretation, neither the expected decision nor this message explains the drop in Romanian yields.

Also on Thursday, the MF published the draft of the first budget revision of 2026, which keeps the deficit target at 6.2% of gross domestic product (GDP) and increases the deficit in nominal terms by 3.5 billion lei, to 130.3 billion lei, BURSA wrote. According to the press, ministries had requested around 60 billion lei in additional funding. In BURSA's interpretation, the draft revision can explain part of the drop in yields only if investors had been expecting a larger deficit; no named source confirms this link.

What comes next

The Government approved the revision on Friday, after the BNR fixing, the press reported. Finance Minister Alexandru Nazare stated after the meeting that the Government is preparing a second budget revision by November 30, according to the press. Monday's fixing, on November 2, is the first following the Government's decision. Monday is also the reopening date for the two bond series, according to the BNR and MF statements. The United States midterm elections take place on Tuesday, November 3, according to Reuters, cited by BURSA.