Hungary for Convergence László Búzás Managing Director ÁKK Rt.
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Hungary for Hungary for Convergence Convergence László Búzás László Búzás Managing Director Managing Director ÁKK Rt. ÁKK Rt.
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Transcript of Hungary for Convergence László Búzás Managing Director ÁKK Rt.
Hungary for ConvergenceHungary for Convergence
László BúzásLászló Búzás
Managing DirectorManaging DirectorÁKK Rt.ÁKK Rt.
Inflation target
Budget deficit
Debt/GDP
Convergence of long-term rates
Market development
Market harmonisation
Convergence CriteriaConvergence Criteria
InflationInflation
Hungary: Headline Inflation
100
102
104
106
108
110
112
jan.99 júl.99 jan.00 júl.00 jan.01 júl.01 jan.02 júl.02
%
Budget Deficit as Percentage of GDPBudget Deficit as Percentage of GDP
4,7%
3,7%
3,1% 3,0%
4,5%
5,7%
0%
1%
2%
3%
4%
5%
6%
7%
1998 1999 2000 2001 2002e 2003f
The 2002 figure excludes one-off items related to the introduction of the ESA95
Debt/GDPDebt/GDP
Public Debt/GDP
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Marketable HUF Debt Non-marketable HUF Debt Foreign Currency Debt
Maastricht criterion
Convergence of Long-term RatesConvergence of Long-term Rates
10 year HGB spread versus BUND
0
100
200
300
400
500
600
70019
99.0
1.20
1999
.04.
20
1999
.07.
20
1999
.10.
20
2000
.01.
20
2000
.04.
20
2000
.07.
20
2000
.10.
20
2001
.01.
20
2001
.04.
20
2001
.07.
20
2001
.10.
20
2002
.01.
20
2002
.04.
20
2002
.07.
20
2002
.10.
20
bps
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
B
A 3 & 15 year bond
3 M T-Bill 2.
5 & 10 year bond
3 M T-Bill 4. week
12 M T-Bill6 M T-Bill3 M T-Bill
3 year bond
12 M T-Bill6 M T-Bill3 M T-Bill 1. week
FridayThursdayWednesdayTuesdayMonday
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 2002
5% 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 PortfolioThe Public Debt Portfolio
Auction CalendarGross and Net Financing Requirements
Remark: 2002 excludes one-off items related to the introduction of ESA95
HUF billion1998* 1999 2000 2001 2002e 2003f
Budget deficit (excluding privatisation income)
370,2 338,1 330,0 413,2 941,5 569,1
Social Security 88,9 46,6 70,0 32,3 17,2 277,1Extrabudgetary Funds 12,5 40,4 0,0 2,3 2,2 -13,9Net Financing Requirements 471,6 425,1 400,0 447,8 960,8 832,3National Bank of Hungary 250,2 17,9
Privatisations (Income (-)) 13,1 -8,0 -0,9 0,0 0,0 -100,0
Redemptions 1843,3 2659,8 3088,7 2995,4 3951,3 4987,0Gross Borrowing Requirements 2327,9 3076,9 3487,8 3443,2 5162,3 5737,2
Domestic Debt: Maturity ProfileDomestic Debt: Maturity Profile
Maturity Structure of the Forint Denominated Government Bonds (31. December 2002)
- 100 200 300 400 500 600 700 800 900
1 000 1 100 1 200
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2026
HU
F B
illio
n
ExternalExternal Debt: Maturity ProfileDebt: Maturity Profile
Maturity Profile Foreign Currency Debt 31. December 2001
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
EUR
Mill
ion
Loans
Bonds
More informationMore information
TThank you forhank you for your attentionyour attention!!
www.akk.hu
Benchmark Yield-curvesBenchmark Yield-curves
6
7
8
9
10
11
12
13
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
years
per
cen
tag
e
29.12.1999
29.12.2000
28.12.2001
31.12.2002
Yield DevelopmentsYield Developments
Benchmarks Yields
6
6,5
7
7,5
8
8,5
9
9,5
10
20
01
.12
.28
20
02
.01
.28
20
02
.02
.28
20
02
.03
.28
20
02
.04
.28
20
02
.05
.28
20
02
.06
.28
20
02
.07
.28
20
02
.08
.28
20
02
.09
.28
20
02
.10
.28
20
02
.11
.28
20
02
.12
.28
pe
rce
nta
ge
3 month 6 month1 year 2 years3 years 5 years10 years 15 years
