Due to the austerity measures taken, the need for funding was reduced. The Ministry of Finance has borrowed. 3 of the six tenders scheduled for the week will not be implemented. A reliable environment can lead to lower costs.
Borrowing from the State Treasury on overseas markets and the temporary government-led savings made it easier. The Ministry of Finance and the Ministry of Finance, which foresees 76 billion saving in the New Economic Program (YEP) and the goals set out in the revenue-boosting package, took action yesterday.
The Ministry of Finance, while saying that the need for funding has decreased, announced that 3 of the 6 calls announced next week will not be implemented.
After the shock of the exchange rate in August, a series of quick responses showed the results of decisions that were not used on the market.
The saving effect
The Ministry of Finance and Finance, Berat Albayrak, asked YEP to cut all budget expenditures from all ministries to 30 percent.
After the move started by the state, the savings are expected to be realized, and in 2019, with measures of savings and an increase in income, the government will generate 76 billion lire of public funds.
Of this amount, TL 60 billion will be provided from savings and 16 billion TL from income-enhancing measures.
Relaxation in external relations helped to relieve the Ministry of Finance of borrowing. On August 10, the dollar / TL test, which tested 7.23, is now in 5.47 seconds.
Decrease in interest
Following a rapid increase in the reference rate, 27.95 points were withdrawn to 21 levels after the test. After the publication of the Treasury, the yield of 10-year bonds fell from 17.71 to 15.98 and moved to 16.19.
We see that the Treasury does not want to borrow at high interest rates with a maturity of 10 years. So, the treasury did not borrow at 22 percent interest for 10 years. This step has shown that falling interest rates and inflation are expected. The tension in external relations and the rising borrowing costs resulting from the exchange rate shock will be exempt from the Ministry of Finance as the new trend is normalized.
On 12 November, the Ministry of Finance will issue a 10-year bond with index of indices with consumer price index and a 10-year fixed coupon bond on November 13 and a seven-year floating rate bond (FRN) with a view to lower domestic borrowing and will reduce interest costs by taking into account net borrowing for 2018. It will not offer. the coupon payment with a fixed coupon bond is re-exported.
In a Treasury statement, the financial program of the Ministry of Finance in 2018 defined debt of $ 6.5 billion from overseas markets and a total of US $ 7.7 billion of external debt by issuing 1.5 billion bonds, concluded on November 7. I However, 2019-2021 In the new economic program, the saving measures adopted in 2018 reduced the need for financing –
Next week there are three offers
The Ministry of Finance is preparing for three bids next week.
– On 13 December 2019, the first issue will be issued with a 13-month bond without a coupon.
– October 18, 2023 buying a 5-year bond with a 10.05% coupon is issued within six months.
– A fixed coupon bond with a coupon payment of 11.5 percent will be reissued within the 6-year, 20-year, 2-year term.