“The Hungarian Debt Management Agency announced the repurchasing of one billion American dollars in high interest USD bonds on Tuesday”, Minister of Finance Mihály Varga informed Hungarian news agency MTI.

“In addition to reducing the interest burden on the budget, the ratio of foreign currency within sovereign debt and ‘s stability will also be improving as a result”, the Minister highlighted. “Successful economic policy, the favourable market environment and the low financing requirement expected this year are together enabling the state to switch its high interest foreign currency debt to cheaper debt that has a significantly longer maturity”, Mr. Varga explained.

“It is also according to this strategy that the issuing of the 20-year forint bond was realised last week”, the Minister pointed out. “The twenty-year security performed in excess of expectations, and the Hungarian Debt Management Agency has already sold a total of 22.8 billion forints (EUR 68 million) worth of the security, which offers an average yield of 3.01 percent”, he explained. “The repurchasing of the USD bonds announced today is another step aimed at facilitating the cheaper financing of sovereign debt, the resources of which do not require the issuing of a new foreign currency security”, he pointed out.

“The lower interest expenditure and the extension of the maturity of sovereign debt further increase the stability of the Hungarian economy and are reinforcing investor confidence in Hungary”, Mr. Varga said, highlighting that these measures are in harmony with the government’s debt reduction goals, thanks to which the debt to GDP ratio fell to around 66-67 percent by the end of last year from some 80 percent in 2010, and is expected to decrease even further this year.

(MTI)