The Public Debt Management Agency is targeting more early loan repayments to the International Monetary Fund next year if the interest cost makes financial sense and the country’s creditors agree, Kathimerini understands. Its loan strategy for 2020 also includes a significant reduction of treasury bills.
Maintaining the state’s high cash reserves – which currently amount to about 32 billion euros and are the country’s main weapon that allow it to borrow at low interest rates – will remain a priority for the PDMA until Greece returns to investment grade.
This principle will be a key guideline for the PDMA next year too. The authority will proceed with cautious and targeted moves to enhance investor confidence further. According to planning to date, debt issues in 2020 may range between 7 and 9 billion euros, depending on market conditions, even if – as Kathimerini has been told – the Greek state does not need to draw a single euro.
This is due to the fact that Greece’s debt repayment needs in 2020 amount to 4.5 billion euros, and that will drop to below 2 billion euros after the 2.7-billion-euro early repayment to the IMF next week. Half of the remainder is to be covered by the primary surplus that in enhanced surveillance terms will amount to 7-7.5 billion euros. Some 6 billion of that will suffice for interest payment, while there is also the 1.3-billion-euro cushion from eurozone central banks’ profits from Greek bond holdings (SMPs and ANFAs), to be returned to Athens next year – half of that will go to servicing the debt.
Despite all that, the PDMA wishes to remain present in the bond market, also strengthening the bond liquidity, and could finance the early repayment of more expensive IMF loans, maturing in 2021 and amounting to 2.03 billion euros. Sources add that the full repayment of the IMF (amounting to some 5.5 billion euros in 2021-24) is not on the table, as the creditors are insisting on the Fund’s presence up to the end of the post-bailout surveillance.