The Czech Republic Government Debt Management Annual Report 2023
Ministry of Finance presents to the public, in accordance with the calendar of published information for the first half of 2024 planned within the Czech Republic Funding and Debt Management Strategy for 2024 published on 4 January 2024, the Czech Republic Government Debt Management Annual Report for 2023. It contains a detailed evaluation of the dynamics and structure of state debt, issuance activity of state on the primary government bond market and operations of the Ministry of Finance on the secondary government bond market, the development of expenditure on state debt service, the evaluation of financial risks and debt portfolio risk management. It also includes an annual evaluation of primary dealers of Czech government securities, with KBC Bank NV / Československá obchodní banka, a. s., PPF banka a.s. and Société Générale / Komerční banka, a.s. being the three most active bank groups in 2023.
The absolute value of the state debt reached CZK 3,110.9 billion at the end of 2023, which represents an increase of CZK 216.1 billion compared to the end of 2022. However, in relative terms to gross domestic product, there was a year-on-year decline from 42.7% to 42.3%.
The average time to maturity of the sold CZK-denominated government bonds increased by 1.4 years to 9.1 years compared to 2022. As a result, the average time to maturity of state debt at the end of 2023 increased by 0.2 years year-on-year to 6.4 years. In the case of the indicator of the average time to maturity after offsetting the nearest state debt redemptions against cash resources from short-term reserve operations on the money market and the total available state treasury liquidity, the levels of these indicators amounted to 6.5 and 7.5 years, respectively, which confirms that the refinancing and liquidity position of the Czech Republic remains stable.
The issuance and sale of state treasury bills denominated in the euro, which are registered in the Central Securities Depository Prague and are also eligible for Eurosystem credit operations, was launched to cover euro financing needs. In 2023, six issues of treasury bills denominated in euro in a total nominal value of EUR 4.5 billion were sold on the domestic market under Czech law, with a total demand of EUR 10.9 billion and with an average yield to maturity of 3.319% p.a. The net issue of state treasury bills denominated in euro including revolving in 2023 amounted to EUR 1.5 billion.
During the 2023, in cooperation with the Czech National Bank, a treasury single account in the US dollar was established, and related operations on the money market in the form of reverse repo operations were initiated. This is a significant continuation of the previous history of successful operation of the treasury single accounts, which have been maintained by the Czech National Bank in the Czech koruna since 2001 and in the euro since 2013. The sum of state budget revenue from operations within the Czech koruna, euro and US dollar liquidity management of the state treasury and also from government bonds lending increased by CZK 1.0 billion year-on-year to a total of CZK 23.6 billion. This was the highest amount of this type of state budget revenue in history, which is netted against realised interest expenditure on state debt service.