Minister for National Economy Mihály Varga said he considers it a sign of confidence in the country that Eximbank last week issued another batch of five-year bonds for USD 500 million on international markets. Investors lending money for a state bank for five years certainly trust the economy of that country, he added.

The dollar-denominated fixed-rate bonds yield 4 percent per annum which is the most favourable dollar rate ever achieved, Mihály Varga said in an interview to Hungary’s public radio.

The Minister stressed the issuance shows that the Hungarian economy is stable enough to allow borrowing, if necessary, any time on foreign markets. It is highly welcome that as the payable interest rate is very low, Eximbank is in the position to lend more for exporters.

In the opinion of analysts, the current successful issuance is indicating that markets are already pricing in an upgrade of Hungary’s creditworthiness. Speaking about this issue Mihály Varga reiterated that the Government is not planning to issue foreign currency denominated bonds, as the financing of Hungarian state debt has been based on domestic resources. As the Minister pointed out, however, such an option cannot be ruled out, especially in case an attractive offer has been made, similar to Eximbank’s. The Minister emphasised that over the past three years central government debt has been on a descending path and this trend will continue – albeit to a lesser extent – this year. It still depends on exchange rates, but the Government is estimating that the level of debt could dip below the 79.4 percent figure seen last year.

Eximbank will use the funds thus raised within the framework of its export stimulus programme, in cooperation with twenty-one domestic commercial banks, for boosting the volume of Hungarian exports.

(Ministry for National Economy)