Cyprus Mail

Impact of clean programme exit on bond yields limited, PDMO says

The Public Debt Management Office, a division of the finance ministry, said that the impact on bond yields from the completion of Cyprus’s adjustment programme, which made government bonds ineligible for the European Central Bank operations, was limited.

“With the exit from the economic adjustment program, bonds of the Republic of Cyprus have not been eligible for ECB operations,” which include the Frankfurt-based currency issuer’s expanded asset-purchase programme, also known as quantitative easing, and monetary policy operations, the PDMO said in a statement on its website. “Despite this, the effect on the yields of the bonds of the Republic has not been significant and the market remains stable at a higher level, while part of the increases in yields can be explained by the general increase in yields of the European periphery countries”.

The secondary market yield of the Cypriot government bond maturing on November 11, 2025, fell on Thursday by 3 basis points in a day to 3.74 per cent which is 17 basis points lower compared to a week ago, Bank of Cyprus said in a statement seen by the Cyprus Business Mail. The drop came after Cyprus reported that its economy expanded an annual 2.6 per cent in the first quarter of the year, in which the government generated a fiscal surplus of €147.2m or 0.8 per cent of economic output.

Still, “yields in the treasury bills market have been re-adjusted in the last two months with 13 week weighted average yield rising from 0.54 per cent in February to 0.79 per cent in April,” the PDMO said.

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