Hungary for Convergence László Búzás Managing Director ÁKK Rt.

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Presentation transcript:

Hungary for Convergence László Búzás Managing Director ÁKK Rt.

Inflation target Budget deficit Debt/GDP Convergence of long-term rates Market development Market harmonisation Convergence Criteria

Inflation Inflation

Budget Deficit as Percentage of GDP The 2002 figure excludes one-off items related to the introduction of the ESA95

Debt/GDP

Convergence of Long-term Rates Convergence of Long-term Rates

The real change comes with EMU-membership Market harmonisation Market development Main goal: Creation of a competitive, efficient and EMU-compatible government bond market EU-Convergence

Price quotation Settlement circle Coupon payment frequency Yield calculation Business days (TARGET) Redenomination Market Harmonisation: Conventions

Auctions (Rules and Frequency) Product innovation Secondary market Primary dealers Foreign investors Market Development

154 auctions in 2002 (104 T-Bill and 52 Bond) Reverse auctions(25) New auction calendar in 2003: The number of bond auctions will decrease from 52 to 46 Less 3 years, more 15 years Larger amounts Auctions

Auction Calendar

3, 6 and 12 month T-Bills 3, 5, 10 and 15 year bonds Less bond series (4 new bond series in 2003) Larger sizes of the individual bond series 2001<EUR 1 bn 2002= EUR 1 bn 2003> EUR 1.5 bn Increasing liquidity Product Innovation

Primary dealers (13 in 2002) Exchange auctions Securities lending Repo facility Electronic trading system Secondary Market

Foreign holdings equal to HUF1800 billion An increase of HUF 730 billion in % T-Bills – 95% Bonds Approximately 50% of the marketable bonds Average maturity 3.5 years Foreign investors

Public debt : HUF 9224 billion Approximately 56% of GDP Domestic debt 75.4%, foreign debt 24.6% Loans 19%, bonds 81% Average maturity: 2.33 years Duration: 1.96 years The Public Debt Portfolio

Auction Calendar Gross and Net Financing Requirements Remark: 2002 excludes one-off items related to the introduction of ESA95

Domestic Debt: Maturity Profile

External Debt: Maturity Profile

More information Thank you for your attention!

Benchmark Yield-curves

Yield Developments