Hungary buys back USD 1 bn in dollar bonds
As reported earlier, the Government Debt Management Centre (ÁKK) was to buy back dollar bonds between 21 and 27 January. The debt manager repurchased USD 1 bn nominal value of four high-interest series maturing between 2021 and 2024 and has closed the futures contracts serving to cover the currency exchange risk at a gain. The buyback was made using the government's existing forint and foreign currency liquidity, so there was no need to issue new bonds, Varga said.
Hungary will save HUF 42.7 on interest payments on an accrual basis through 2024 as a result of the buyback, of which HUF 16.5 bn will be realised in 2020, the minister said.
Hungary is continuing to decrease its debt-to-GPD ratio and is increasingly using domestic instead of foreign funding to finance its debts, making the economy more stable, Varga said.
Meanwhile, Hungary's country risk index has improved to a 12-year high, 47 basis points, indicating that its debt can be financed at a lower cost and that the assessment of the Hungarian economy is improving, Varga said, adding that Hungary has caught up to Poland in this index.
Cover photo: MTI/ Lajos Soós
