Central government debt declines 5.6% to €22.5b in Q3

Cyprus’ central government debt, which makes up 99% of the Republic’s total debt, declined to €22.5 billion in the third quarter of 2023, marking a reduction of €1.33 billion, or 5.6% compared with the previous quarter.

Compared with the respective period of last year, the central government debt dropped by €1.24b or by an annual 5.2%.

According to a quarterly bulletin issued by the Finance Ministry’s Pubic Debt Management Office, in Q3 there were debt redemptions and early repayments amounting to €1.3 billion.

In July of 2023 an EMTN bond for the amount of €1b matured. Short- term debt redemptions amounted to €75m whilst retail bond repayments, including early repayments, amounted to €18m, while in August, the Republic proceeded with the early repayment of a domestic bond amounting to €300m.

Loan amortizations amounted to €17m.

Furthermore, the total amount of the 13-week Treasury Bills auctions in the third quarter of 2023 reached €35 million, with the weighted yield rising to 3.9% when compared to the second quarter of 2023 which stood at 3.5%.

Moreover, the bid-to-cover ratio for the third quarter of 2023 decreased to 2.7 from 3.8 in the previous quarter, as investors opt for other fixed income assets fuelled by the rising interest rates.

The loans granted by the European Investment Bank in the third quarter of 2023 amounted to €45 million.

According to the PDMO, 58.4% of Cyprus’ central government debt was in foreign bonds, followed by the loan of the European Stability Mechanism which amounted to 28.8% of Cyprus’ debt, whereas loans by the European Investment Bank, the Council of Europe’s Development Bank and EU funds such as Sure represented 8% of the total central government debt.

In Q3 2023 96% of the debt was foreign debt and just 4% was domestic.