Romania's Treasury issued this week a bond with a 58-month residual maturity at an average yield of 4.15%, 75bps lower than the yield in the previous opening of the same benchmark bond on Dec 9 , the central bank announced. The size of the issue was extended to RON 713mn ( EUR 157mn ) from the RON 500mn target, strengthening the relevance of the drop in the yield for the 5-year securities. The orders placed by banks reached RON 1.85bn. The results of the 58-month debt auction come against the steepening in the yield curve seen in recent months when the yields on longer maturities have actually increased slightly, while the ones on short-term maturities decreased markedly amid excess liquidity on the money market. The excess liquidity on the market seems, however, to have increased in general, not only for the short-term maturities, after the central bank cut the reserve requirements for banks releasing some RON 3.5bn and EUR 400mn into their vaults. Still, the pattern has to be confirmed by further issues of bonds on the market.
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