Debt Portfolio Management Quarterly Report - 1st - 3rd Quarter of 2023
The Ministry of Finance presents, in accordance with the calendar of published information, the Debt Portfolio Management Quarterly Report, which contains the state of fulfilment of the operational funding programme and issuance activity plans in relation to the announced strategic targets and limits specified in the Czech Republic Funding and Debt Management Strategy for 2023 published on 3 January 2023 and updated on 30 June 2023. It also includes regular quarterly evaluations of primary dealers of Czech government securities for the period from the fourth quarter of 2022 to the third quarter of 2023, 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 this period.
The absolute value of state debt reached CZK 3,115.0 billion at the end of the third quarter of 2023, which represents an increase of CZK 220.2 billion compared to the end of 2022. In relative terms to GDP, it reached 43.1%, compared to 42.7% at the end of last year. It is mainly due to the sale of government bonds for the purpose of ongoing coverage of the state budget deficit, which reached CZK 180.7 billion at the end of September, and pre-financing of the remaining state debt redemptions, in particular regular redemption of the Government Bond of the Czech Republic, 2015–2023, 0.45% in a total nominal value of CZK 62.8 billion on 25 October 2023.
During the first three quarters of 2023, CZK-denominated medium-term and long-term government bonds were sold in a total nominal value of CZK 407.6 billion, of which CZK 46.1 billion in the form of variable-rate government bonds, including two tranches of a new issue of variable-rate government bonds with the historically longest maturity of 20 years, which was sold in a total nominal value of CZK 19.6 billion. The average yield to maturity of newly sold fixed-rate government bonds reached 4.5% p.a. with the average residual time to maturity of 8.5 years.
During the third quarter of 2023, the state treasury single account in US dollar was also established in cooperation with the Czech National Bank and related money market operations in the form of reverse repo operations were initiated. Short-term investments with financial collateral in the form of the Czech National Bank bills amounted to USD 185 million and were carried out in the pilot mode within the US dollar liquidity management of the state treasury. As part of these operations, an average interest rate of 5.3% p.a. was achieved. This represents a further technical step towards a more efficient management of the state treasury financial resources and a significant continuation of the history of successful operations of state treasury single accounts, which have been maintained by the Czech National Bank for the Ministry of Finance in the Czech koruna since 2001 and in the euro since 2013.