General government debt under €25 billion at end April

Cyprus` general government debt is estimated to be at €24.8 bn at the end April 2021 having been at a historic high of €26 billion in the previous month.

According to the 33rd edition of the Public Debt Management newsletter issue of June 2021, general government debt is estimated to be at €24.8 bn at the end April 2021, "which is about at the same level as at the end of 2020."

This, it adds, "is due to the maturity of €1.25 billion of 52 weeks T-Bills issued in April 2020 as a precaution for the effects of the pandemic."

The newsletter also notes that during Q1 of 2021 yields of the Republic’s bonds reached their lowest levels in February 2021 but then started to rise in line with all European markets continued to drop following the trend of other European sovereigns.

This, it says, "was linked to the expectations about rising inflation in Europe in 2021."

"In the past few weeks as inflation expectations have been revised and the ECB has committed to continuing its accommodative stance this rise has been partly offset," it notes.

It continues, "yields remain at very low levels with all bonds of the Republic up to a maturity of six years are trading in the negative area."

During this year, the 10 year yield of the Republic (2030 maturity) exhibited a low level on the 5th of January at 0.125% and a maximum level on the 19th of May at 0.591%. Currently it is trading at 0.297% (13 June 2021), the newsletter reads.

The yield at the monthly 13-week Treasury Bill auctions continued to drop since Q4 2020. The latest auction in February 2021 recorded a weighted average yield of -0.34%. Participation by domestic banks has been quite strong and expected to continue, it adds.

According to the newsletter, "currently liquid assets are significant and are adequate to cover the financing needs of the Republic for 2021 and part of 2022."