Thanks to the austerity measures, the need for financing has decreased. The treasury breathed a loan. 3 out of 6 tenders planned for a week will not be submitted. An environment of trust can lead to lower costs.
Loans granted by the state treasury in the overseas markets and a savings movement initiated by the government brought relief. The Ministry of the Treasury and the Ministry of Finance, which envisage 76-billion savings in the new economy program (YEP) and the goals set in the income-raising package, took action yesterday.
Stating that the need for financing has decreased, the Treasury Ministry announced that 3 out of 6 tenders announced next week will not be submitted.
After the exchange rate shock in August, a series of quick reactions showed the results of decisions taken by unused markets.
The savings effect
Minister of Treasury and Finance, Berat Albayrak, asked YEP to reduce all budget expenditures from all ministries to 30 percent.
As a result of the state-initiated traffic, savings are expected to be realized, and in 2019. It aims to create 76 billion lire of public resources by means of saving and increasing income.
Of this number, 60 billion TL will come from savings, and 16 billion TL from income-boosting measures.
Relaxation in foreign relations helped the Treasury ease the loans. On August 10, the dollar / TL test, which tested 7.23, is now in 5.47.
Downtrend in business
After a sharp increase in the reference interest rate, 27.95 items to 21 levels were withdrawn after the test. After the announcement by the Ministry of Treasury, the yields on 10-year bonds fell from 17.71 to 15.98 and moved to 16.19.
We see that the State Treasury does not want to incur high interest rates with a maturity of 10 years. Thus, the State Treasury did not lend at 22 percent interest for 10 years. This step showed that interest rates and inflation are expected to decline. The tension in foreign relations and the growing costs of financing as a result of the exchange rate shock will be abolished by the State Treasury as the new trend normalizes.
The State Treasury will issue a 10-year CPI indexed bond on November 12 and 10-year coupon bonds on November 13 and a 7-year floating rate loan (FRN) to reduce the domestic loan amount and reduce interest costs, taking into account the net loan limit of 2018 . he will not submit an offer. a coupon payment with a fixed coupon interest rate will be re-exported.
There's no need
In the Ministry of Finance's communication, the Treasury financing program in 2018 provided for a loan of USD 6.5 billion from foreign markets, and a total of USD 7.7 billion of external debt was realized, and a bond issue worth EUR 1.5 billion ended November 7: ı However, 2019 -2021 In the new economic program, thanks to austerity measures taken in 2018. The need for financing has decreased.
There are 3 tenders next week
The treasury is preparing for three bids next week.
– 13 December 2019. It will be issued for the first time with 13-month bonds with no coupons.
– October 18, 2023. Redemption A 5-year fixed coupon with a 10.12-percent coupon payment will be issued within 6 months.
– A fixed coupon with a coupon payment of 11.5 percent will be re-issued on a 6-year, 20-year, 2-year coupon.