The Czech Republic Funding and Debt Management Strategy for 2022
The Ministry of Finance publishes The Czech Republic Funding and Debt Management Strategy for 2022, which is submitted as a preliminary for the period of the provisional budget. After revision of the draft of the State Budget Act of the Czech Republic for 2022, an update of the strategy will be published after its approval.
For 2022, state debt redemptions amounted to CZK 273.5 billion, i.e. approximately 4.2% of GDP. State debt redemptions are declining in medium-term horizon compared to 2022 in absolute terms and also as a share of GDP to CZK 128 billion, i.e. 1.8% GDP in 2024. The total financing needs will be determined after the approval of draft of the State Budget Act of the Czech Republic for 2022.
As of 3 January 2022, the Ministry of Finance issued two issues of “Dluhopis Republiky” bonds in the record total nominal value of CZK 41.1 billion, which covers more than 28% of the total CZK-denominated medium-term and long-term government bonds redemptions in 2022, resp. 55% of these redemptions in the first half of the year. The Ministry of Finance plans to cover remaining financing needs mainly by issuing CZK-denominated medium-term and long-term government bonds in total minimum nominal value of CZK 350.0 billion to CZK 400.0 billion. In dependence on the development on the financial markets and the monetary policy situation, the Ministry of Finance plans to issue at least two new issues of fixed-rate medium-term and long-term government bonds denominated in local currency.
During the first quarter, in cooperation with primary dealers the preparations for the refinancing of EUR-denominated state debt redemptions will be initiated through available alternative most effective debt instruments in line with current best practices of international government bonds market, including a possible new issue of government EUR-bonds issued under Czech law on the domestic market.
The main parameters of the Czech Republic Funding and Debt Management Strategy for 2022 and of the funding programme and issuance activity focusing in the first quarter of this year will be presented in more detail and discussed with representatives of Primary Dealers and the Czech National Bank on the 25th Primary Dealers Committee during the videoconference held on 6 January 2022.