Filenews 9 May 2024
With cash at a very satisfactory level, approaching €2.82 billion, the Government has completed 2023.
The reserve is estimated to cover the financing needs of 2024 but also most of the financing needs of 2025.
According to the report of the Office of Public Debt Management, total liquid assets recorded an increase in January 2023 by €300 million, compared to the remaining liquid assets at the end of December 2022, due to the fiscal surplus achieved in December 2022.
In April 2023, the cash buffer increased significantly due to the issuance of a new EMTN, while in July it recorded a significant decrease due to the repayment of the 7-year EMO (European Medium Term Note) (EMTN) of €1.0 billion. Thereafter, the cash buffer fluctuated slightly and stabilised at €3.1 billion. until the end of November 2023. Towards the end of 2023, Liquid assets approached €2.8 billion.
The size of liquid assets during 2023, according to the report, met the relevant target set in the strategy, to cover the financing needs of the next 6-9 months at any time.
During 2023, the size of liquid assets remained well above target, thus providing flexibility for the Government to decide on the right timing for market access as well as the ability to deal with unexpected events.
"The strong cash position of the Republic of Cyprus is expected to support the Government in addressing the uncertainty observed in the global economy and limiting any negative impact on cost-risk ratios to moderate levels," the DG clarifies.
The report states that the annual debt maturity is at satisfactory levels and extends until the year 2051. "The highest outstanding public debt on an annual basis concerns the year 2028, which is not of particular concern considering that in the recent past there has been a much higher annual debt maturity, as well as the strong recovery of the Cypriot economy starting from 2021 in light of the expected positive prospects for economic growth in the medium term," he said. Noted.
Reference bond
The intention of the DG for the coming years is to issue at least one EMO reference bond (EMTN) per year with an amount raised between €1.0-1.5 billion. for the purpose of covering the financing needs of the Government. In order to further smooth the debt repayment schedule, the Office of Public Debt Management will focus on issuing debt securities with longer maturities as market conditions and the new interest rate environment become favourable. The size of the issue will depend on the performance of fiscal policy, as well as on the progress of economic activity in the real economy.
Total outstanding debt, maturing in the period 2024-2028, is close to €11.61 billion. or about 51% of total debt. During the above period, an amount of €6.60 billion. or about 57% of the total debt maturing in this period is related to European bond repayments and amounts to €4.63 billion. or about 40% concerns loan repayments of this period. The remaining amount concerns domestic bonds and bonds to natural persons. The year 2028 depicts the largest annual debt concentration of €2.80 billion, of which €1.5 billion. or approximately 53% related to the repayment of EMO and an amount of €1.29 billion. or about 46% with loan repayments, largely related to the repayment of the fourth tranche to the ESM.
