Hungary might have to borrow $ 3,94 billion in 2017

Economy Adina Camarasu
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Hungary will finance the majority of its debt that would come to maturing in 2017 through emissions in forints, according to its target on reducing the share of the foreign currency debt to below 20% in 2020, from 25% in 2016, declared on Wednesday the Hungarian Minister of Economy, Mihaly Varga, as Reuters informs.

By moving funding towards programs forint-denominated bonds, Hungary’s dependence of currency and bonds in foreign investors dramatically fell after 2010, when the government led by Viktor Orban took the power.

‘The objective is that the vulnerability of the country continues to decrease’, said Mihaly Varga during a press conference.

Next year, Hungary has to repay its foreign currency debts worth $ 2.5 billion, which it’s intended to cover by issuing international bonds.

Mihaly Varga stressed, however, that the volume of bond issues could be reviewed both upward and downward, depending on the market opportunities.

Since 2014, Hungary has launched two bond issues on the international markets, an emission of dollars in 2014 and its first yuan bonds in April 2016.

Debt Management Agency Director, Gyorgy Barcza, said in turn that the net borrowing of the Hungarian state in 2017 will be of 1,166 billion forints ($ 3.94 billion) while the raw financing will be of 7.844 billion forints and the issuance of bonds are planned at 8.083 billion forints.

After five years, during which the rating agencies have granted Hungary a grade of ‘junk’ because of its economic unorthodox policies issued by the authorities in Budapest, all three major rating agencies have improved the rating of Hungary to the recommended investment grade, mainly thanks to the improvement of public finances.