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Ministry of Finance gives further clarifications and details on recent bonds issue

LoveCyprus — Fri, 10 Apr 2020 06:08:05 +0000

The recent issue of bonds by the Republic was solely intended to offset the reversal of the fiscal balance and to decisively strengthen the precautionary reserve of the state, because of the uncertainty and consequences of Covid-19 in the Cypriot economy, the Public Debt management Office says in a statement.

According to the announcement of the Republic of Cyprus, the issuance of the 7-year and 30-year European bonds on April 7, took place within the framework of the Annual Financial Program 2020, as recently revised to cover mainly the loss of fiscal revenue due to the economic implications of the pandemic.

It is added that the sole purpose of this bond issuance was to offset the reversal of the fiscal balance, from a fiscal surplus to a fiscal deficit mainly due to the reduction in tax revenues, resulting from the declining course of GDP due to the effects of Covid-19, but also because of the supportive measures in the approved supplementary budget. On the other hand, the bond issue aims to decisively strengthen the precautionary reserve maintained under the Public Debt Management, given the international economic uncertainty and as a result of the unknown duration of the pandemic.

Seven-year bond
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The 7-year bond allowed the Republic of Cyprus to raise an amount of 1.25 billion euros from a total of 1.8 billion euros offered. The bond effective date is 16 April 2020 and the maturity date is 16 April 2027. The bond yield was 1.564%. The annual interest rate was set at 1.50%.

Thirty-year bond
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With the 30-year bond, an amount of 0.5 billion euros was raised from a total of 0.8 billion euros offered. Its effective date is April 16, 2020 and its maturity date is April 16, 2050. The bond yield was 2.339%. The annual interest rate was set at 2.25%.

For the above two bonds, more than 240 bids were submitted, with more than 98% of the bidders coming from the international market.

Additionally, the Ministry of Finance clarifies that above bond issues, as well as any new issues, are not related to the recent proposals for the issuance of a bond in order to support the private sector of the economy.

At this stage, it is added, private sector support could only be sought indirectly through mechanisms that would make it possible to use -with due diligence- the available banking liquidity.

Source: CNA

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Cyprus coronavirus economic package to amount to €1.5 billion, CNA learns

LoveCyprus — Tue, 24 Mar 2020 07:05:05 +0000

Cyprus’ Finance Ministry is working to finalise a revised economic support package which will amount to at least €1.5 billion, approximately 7% of GDP, reliable sources told CNA.

Last week Finance Minister Constantinos Petrides announced a financial support package amounting to €700 million equivalent to 3% of Cyprus’ GDP. However, Petrides following a meeting with parliamentary parties, announced the government will approve additional measures, including the provision of government guarantees.

According to a FinMin source, Petrides will continue contacts today and tomorrow with the Central Bank Governor, Constantinos Herodotou, with representatives of political parties and with the CEOs of commercial banks.

Petrides will meet with Herodotou today along with the FinMin’s and CBC dedicated teams to discuss the issue of granting government guarantees to borrowers affected by the coronavirus epidemic.

The aim is to finalise the revised economic package tomorrow the latest in a bid to submit bills to the Council of Ministers for approval, the same source told CNA.

“The package will amount to at least €1.5 billion,” a high-ranking official told CNA, noting that the package will include direct support, deferred government income in the form of payment suspension of direct and indirect taxes and other fees, as well as government guarantees which will not incur fiscal impact unless they materialise.

Source: CNA

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Cyprus in 2019 marks five years of consecutive economic growth

LoveCyprus — Wed, 04 Mar 2020 08:04:45 +0000

Cyprus in 2019 marked its fifth consecutive year of economic expansion since the 2013 financial crisis, with the Ministry of Finance noting that the Cypriot economy lies on “a solid base” but efforts should continue to shield the economy.

According to data released by the Cyprus Statistical Service (Cystat), Cyprus’ real GDP grew in the fourth quarter of 2019 by 3.2%, marking twenty quarters of consecutive growth. For 2019 the economy also expanded by 3.2% in its fifth year of consecutive growth.

The Cypriot real GDP in absolute terms amounted to €21,346 million in 2019 while nominal GDP reached €21,943 million, marking 3.8% growth year on year.

The economy lies on a solid base

In a press release, the Cypriot Finance Ministry noted that “these developments show that the economy is premised on a solid base, while through growth new jobs are created improving the standard of living of our fellow citizens,” adding that this is confirmed from the rapid reduction in unemployment rate which fell to 7.1%.

“As the data show the government’s economic policy is bearing fruit both concerning income and the labour market,” the FinMin notes, adding however that “the effort should continue with seriousness and responsibility with a view to shielding and improving our country’s credibility.”

Source: CNA

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