Treasury Bonds Down 34%

تم نشره في Sun 2 July / Jul 2017. 12:00 AM
  • Index down, decline - (Archives/Expressive)

AMMAN —AlGhad— The overall value of treasury bonds issued by the Central Bank of Jordan (CBJ) in open auction to local banks in favour of the government during the first half of this year, H1-2017, declined by JOD700 million, approximately 34 per cent, compared bonds issued in H1-2016.

Treasury bonds, which has helped the government finance part of its deficit since the beginning of the year 2017 through June 30th, stands at JOD1.35 billion.

By the end of June 2016, the government had borrowed JOD2.05 billion in bonds to cover parts of its deficit.

The latest auction on government bonds so far, was held on the 19th of June, 2017.

In the first three months of the year, 2017, the government issued two batches of treasury bonds worth JOD25 million.

The first batch was issued for 3 months at an interest rate of 3.033 per cent, and the second was issued at an interest rate of 3.272 per cent and a maturity rate of 6-months.

The decline in theoverall value of treasury bonds issued comes as part of the government's efforts to reduce domestic debt.

Reducing domestic debt is crucial to avoid competition by the private sector over credit facilities.

The government also issued Eurobonds for international markets within the approved cash flow plan for 2017, which was prepared in accordance with a public debt strategy aimed at diversifying funding sources and reducing borrowing costs, as well as increasing maturity of the public debt portfolio.

In April, the Ministry of Finance announced the successful completion of the issuance of USD500 million worth of Eurobond bonds, at a return rate of 5.875 per cent.

The total volume of investors' subscription exceeded USD1.7 billion, over three times the size of the issuance.

According to the latest statistics by the Ministry of Finance, the net balance of domestic public debt (public budget and budgets of independent institutions) has reached JOD13.908 billion at the end of the first four months of 2017.

Domestic debt comprises around 49.9 per cent of the estimated GDP, so far.

Combined domestic and foreign debt has also increased to approximately JOD26.24 billion by the end of the first 4 months of the year, from JOD26.09 billion in 2016.

Debt now comprises in total around 94.1 per cent of the GDP estimate for 2017, compared to 95.1 per cent in total for the year 2016.