Thursday , July 7 2022

The vault reduction is reduced


Thanks to the measures taken, the need for funding has been reduced. The vault expired lending. 3 of 6 offers scheduled for the week will not be made. A reliability environment can lead to cost savings.

Treasury borrowing in foreign markets and launching an initiative to initiate savings enabled relief. Treasury and the Ministry of Finance, which anticipate 76 billion euros in savings in the New Economic Program (IEP) and goals set in the revenue-raising package, have taken action yesterday.

Stating that the need for funding has been reduced, Treasury has announced that 3 out of 6 tenders announced next week will not be made.

After the exchange rate shocks in August, a series of quick reactions showed the results of decisions that the markets were unused.

Saving effect

Minister of Finance and Finance Berat Albairak asked the IEP to cut all budgetary expenditures from all ministries to 30 percent.

After movements initiated by the state, the realization of savings is expected, and in 2019 it aims to create 76 billion lira of public funds through austerity measures and revenue increases.

Of this figure, 60 billion TL comes from savings and 16 billion TL from measures of income increase.

Relaxation in external relations helped the Treasury to relax in debt. The August 10 dollar / TL test that tested 7.23 is now at 5.47 seconds.

A downward trend in interest

After a rapid increase in the reference interest rate, after the test, 27.95 seconds were withdrawn to 21 levels. After Treasury announcement, the 10-year bond yield fell from 17.71 to 15.98 and moved to 16.19.

We see that the Treasury does not want to borrow at high interest rates with a maturity of 10 years. Therefore Treasury did not borrow from 22% interest for 10 years. This step has shown that falling interest rates and inflation are expected. Tension in foreign relations and rising lending costs as a result of exchange rate shocks will be exempt from the Treasury as the new trend is normalized.

Cancellation of "long-term"

The Treasury will issue a ten-year bond with indexed consumer price index and a fixed coupon of 10 years on November 13, as well as a seven-year variable interest rate bond (FRN) with a view to reducing the amount of domestic borrowing and reducing interest rates, taking into account the net borrowing limit for 2018 will not offer a tender. coupon payments with a fixed coupon connection will be re-exported.

There is no need

In a Treasury statement, the Treasury Treasury Program in 2018 envisaged a $ 6.5 billion indebtedness from foreign markets, and a total of $ 7.7 billion of external borrowing was made by issuing 1.5 billion euros of bonds closed on November 7: ı However, 2019 -2021 In the New Economic Program, thanks to the austerity measures taken in 2018, the need for funding has been reduced.-

Next week there are 3 offers

Treasury prepares for three bids next week.

– On December 13, 2019, it will be issued for the first time with a 13 month bond without coupons.

– October 18, 2023, the purchase of a 5-year fixed coupon bond with a 10.05% coupon will be issued in 6 months.

– A fixed coupon bond with a coupon payment of 11.5 percent will be reissued on a six-year, two-year and two-year mandate.

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