Debt Portfolio Management Quarterly Report - 1st Quarter 2022
The Ministry of Finance presents, in accordance with the calendar of published information, the Debt Portfolio Management Quarterly Report, which contains, in particular, the evaluation of the announced strategic targets and limits, the operational fulfilment of the funding programme and issuance activity plans, which were specified in The Czech Republic Funding and Debt Management Strategy for 2022 published on 6 January 2022 and updated on 1 April 2022. It also includes regular quarterly evaluations of primary dealers for the period from the second quarter of 2021 to the first quarter of 2022.
The absolute value of state debt reached CZK 2,593.9 billion at the end of the first quarter of 2022, which is 41.4% of GDP in relative terms. Compared to the end of 2021, it is a quarter-on-quarter increase of CZK 128.2 billion. This is mainly due to the sale of government bonds with a maturity of more than one year during the first quarter of 2022 to pre-finance the April redemption of the Government Bond of the Czech Republic, 2020–2022, 0.10% in the total nominal value of CZK 69.0 billion, and the ongoing coverage of the state budget deficit, which reached to CZK 59.1 billion at the end of March. After adjusting the value of the state debt for the effects of the pre-financing of this April redemption, the state debt would have amounted to CZK 2,524.9 billion at the end of March, which is 40.3% of GDP in relative terms.
During the first quarter of 2022, the regular issuance activity of the state was carried out in the standard mode, regardless of the state organizational unit’s performance according to the indicators of the provisional budget, especially for the purpose of pre-financing the CZK-denominated redemptions of the state debt, when the Ministry of Finance sold government bonds with a maturity of over one year in the total nominal value of CZK 134.2 billion, thus ensuring the coverage of more than 92% of the total redemptions of CZK-denominated medium-term and long-term government bonds for this year. In the first quarter of 2022, the medium-term and long-term government bonds were sold on the primary and secondary market in the total nominal value of CZK 93.0 billion with average yield of 3.42% p.a. and average time to maturity of 11.2 years. As part of the project of direct sale of government bonds intended for citizens, two issues of the “Dluhopis Republiky” government bonds in the total amount of CZK 41.1 billion were issued on 3 January 2022. In January and February, new tranches of already issued government bonds in the form of reinvested yields were issued in total nominal value of CZK 123 million.
During the first quarter of 2022, rating agencies Moody‘s, Scope Ratings and ACRA affirmed their current ratings on the Czech Republic while maintaining a stable outlook. The Czech Republic is assigned the highest overall rating of all Central and Eastern European countries and has higher rating than the Euro Area member countries average for several years. It belongs among the exceptionally reliable issuers, as confirmed by its high credit rating with a stable outlook from all the major credit rating agencies with international scope of activity.