Hungary will start repaying in 2011 a €20 billion IMF-led loan it signed for at the height of the global financial crisis, the National Economy Ministry said on Monday.
Consolidation is continuing in Hungary: the state returned to market financing in 2010 and it will start repaying the loan from the IMF and EU in 2011, the ministry said in a report on the domestic government securities market.
Hungary was originally scheduled to start repayments of the loan in Q4 2011 with a €2 billion repayment due to the European Union, the Finance Ministry under the previous government said at the end of 2009. Hungary last drew on the IMF-led loan in the summer of 2009. The loan expired in October 2010. The Hungarian government called down close to € 13 billion and the National Bank of Hungary (NBH) €1.5 billion. About €3.5 billion of the called loan is unspent and deposited with the NBH.
The average coverage ratio at the bi-weekly bond auctions has reached 2.7 on the back of strong demand by domestic and foreign investors, allowing the Government Debt Management Agency (AKK) to raise offers, the ministry said. In 2010, AKK raised its original offer at 30% of auctions on strong demand. It lowered the offer on weak demand at just 9% of the auctions. Gross bond issues reached HUF 1,399 billion or about €5 billion.
AKK sold another HUF 258 billion of bonds at non-competitive tenders after the auctions, the ministry noted. Volume at bond exchange auction, designed to increase the average time to maturity of government debt, came to HUF 32 billion. AKK issued HUF 3,730 billion of discount T-bills in 2010. The average coverage ratio at the auctions was 2.6. (Econews)