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Government debt rises to €19bn in December

Cyprus’s public debt rose by €357.1m in a year, to €19bn last December, the Public Debt Management Office (PDMO) said.

The largest creditor was the European Stability Mechanism (ESM), which, together with the International Monetary Fund (IMF), financed Cyprus’s bailout four years ago with €6.3bn and €1bn respectively, the PDMO said. The second largest creditor was the Russian Federation with an outstanding loan of €2.5bn.

The public debt also included €4.2bn in European Medium Term Notes traded on the secondary market abroad, €2.1bn in domestic securities, broken down to €1.2bn in government development stock, €566.3m in bonds purchased by individual investors, and €299.9m in treasury bills, the PDMO said.

Government debt to the Central Bank of Cyprus was €1.2bn in December, while that to the Cooperative Central Bank was €370.4m. Government debt also includes €229m in guarantees for loans extended through the European Financial Stability Fund to Greece, Ireland, and Portugal.
The rest consists of loans mainly from the European Development Bank.

The increase in public debt in 2016, a year in which the government balanced its budget, is mainly attributable to the €1bn seven-year government bond issued in July. The government used up €558m to buy back debt over the past months to smooth out future maturities.

Total maturities for this year were estimated in December at €761m, a figure that includes government development stock worth €167.4m, which already matured, and €199.9m in 13-week treasury bills that were rolled over, the PDMO said.

Next year, when Cyprus is due to repay the first instalment of the Russian loan, total maturities will rise to €952m. In 2019 and 2020, total maturities will almost reach €1.9bn and €1.7bn respectively.
The portion of debt maturing within the next five years, accounts for 34 per cent of the total, the PDMO said.

At the end of December, the government held deposits totalling €717.8m at the Central Bank and €958m at commercial banks.

The interest rate of 54 per cent of its debt was fixed and the rest floating, broken down to 71 per cent in ESM loans, 11 per cent in IMF loans, 14 per cent bank loans and 4 per cent in other loans.

Finance minister Harris Georgiades said on Tuesday that the government considers tapping international markets with a bond this year.

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