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€20 bln support package more than covers state external financing requirement

A €20 billion stand-by credit line provided Hungary  is more than enough to cover Hungary’s gross state external financing requirement until the end of March 2010, when the credit line expires, Econews calculated. It could also provide a buffer to support private sector financing needs if necessary.

 

Hungary’s general government and the National Bank combined had €2.57 billion in short-term (originally less-than-one-year) debt at the end of June, Econews calculated based on the latest available National Bank of Hungary (MNB) data.

On top of short-term debt, €4.96 billion in long-tem state foreign debt is due to expire between October 1, 2008 and March 31, 2010, MNB figures show. Of this debt, however, €2.86 billion worth is owed in forints on forint-denominated government bonds held by foreign investors, cutting the state-MNB external foreign currency repayments on long-term debt due over the run of the credit line to €2.1 billion.

Foreign currency denominated general government foreign debt could actually be less as Hungary has been taking out part of the loans from international financial institutions in forint now for a while.

Hungary’s private sector had €13.85 billion in (originally) short-term foreign debt (including trade finance), as the country’s such debt totaled €16.4 billion at the end of June. In addition to the above short-term debt, the private sector owed €8.79 billion in long-term foreign debt maturing between the beginning of October this year and the end of March 2010, as of the end of June.

The figure does not include foreign direct investment related (intercompany loans) of non-financial companies, but does include debt owed by Hungarian banks to their parent banks. Of private sector foreign debt expiring by March 2010, the bulk or €7.5 billion was owed by banks, MNB figures show.

The MNB data put Hungary’s total gross external debt -- including originally short- and long-term debt, and excluding intercompany loans of non-financial companies -- was €89.9 billion at the end of June, with €34.7 billion owed by the state and the MNB, and €55.2 billion owed by the private sector. Debt on FDI-related loans of the non-financial private sector totaled €21.91 billion at the end of June.

Hungary’s international reserves totaled €17.41 billion at the end of September, up €99 million in a month and up €119 million from the end of June. (MTI-Econews)