Hungarian Government Debt Management Agency: 42% of the annual issuance plan already met
42% of the approved 2023 financing plan was completed by 31 March, 2023. The average residual maturity of central government debt is 6.2 years, including 4.9 years for HUF debt and 9.9 years for foreign currency debt, they said.
The ÁKK recalls that the medium-term debt management strategy was revised at the end of last year. To ensure financing flexibility, the upper limit of the benchmark for the foreign currency ratio of the public debt was raised to 30% by 2023 from the previous 25%, while the lower limit was removed.
The HUF retail market gross issuance plan was 39% met. The estimated stock of government securities held by households at end-March is HUF 9097 billion, HUF 531 billion higher than at end-2022.
Gross issuance in the HUF retail market in the first quarter of 2023 is HUF 664 billion higher than planned on a pro-rata basis, mainly due to strong sales of Premium Hungarian Government Bond (PMÁP) and Bonus Hungarian Government Bond (BMÁP). The total stock of retail government securities increased from HUF 8,972 bn at end-2022 to HUF 9,306 bn, driven by an increase in the stock of retail securities held by households, while institutional holdings decreased.
ÁKK will continue to focus on broadening its investor base, increasing the number of customers and encouraging medium and longer-term retail savings. At the end of February 2023, the number of customers with government securities in Hungary reached 784,326, an increase of 18,748 compared to the end of 2022, the statement said.
The strategic objective of the ÁKK is to minimise the long-term interest cost of public debt, taking risks into account, and to smooth the maturity structure. Given the changes in investor demand, the ÁKK plans to hold 3-year forint government bond auctions again in 2023 and a HUF 390 billion government bond swap auction programme from the second half of the year, if the yield environment normalises.
According to the report, 100% of dollar bond issuances under the adopted 2023 funding plan and 67% of the annual foreign currency funding plan were completed by 31 March 2023. Additional project loans (e.g. EIB, China Exim) are expected to be drawn down during the remainder of the year to meet the foreign currency financing requirement, based on the practice of previous years. A euro-denominated bond issue is also expected in the second half of the year, the timing of which will be decided by the ÁKK at a later stage.
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