Indicator - Economy - The arrival of a new government safety measure to track inflation

Indicator – Economy – The arrival of a new government safety measure to track inflation

22/4/2022 10:40
Modified date: 02/22/2022 11:08

Not even two months have passed since the previous government inflation-tracking insurance was introduced, but the Public Debt Management Center has already issued a new five-year guarantee to the Hungarian government. From next Wednesday, it will be available for purchase of the PMÁP 2028/J series. The interest rate premium will not change, but anyone wishing to buy from the previous PMÁP 2028/I series will have the opportunity to do so until next Tuesday.

ÁKK will issue a new series of five-year Hungarian premium government securities, the sale of which will begin on April 27. The name of the new series PMÁP 2028 / J it will be. Thus, the former PMÁP 2028 / I The sale of the series will be closed by the debt manager on April 27, the last of the series will be available for purchase on Tuesday, April 26, while the new paper will be available from April 27.

The interest rate premium will not change compared to the previous series, it will remain the same at 1.5 percent, so adding the previous year’s inflation figure of 5.1 percent will give you 6.6 percent per annum in the first interest period (6.46 percent in nominal terms). Payable on April 20 of next year, because less than a year will elapse before the first interest round).

Due to rising inflation, demand for premium Hungarian government securities increased, so the declared volume of the previous series may have run out, and ÁKK decided to introduce a new series instead of the quantitative issue. The government is trying to shift the maturity structure of the government debt towards the longest possible average remaining maturity date, as this may be the key to secure long-term financing, and perhaps an argument in favor of introducing a new series, as the previous series expired on February 23, 2028. A new series will expire in time Later, on April 20, 2028.

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It is also possible to choose the inflation tracker from government securities, because this year we expect higher inflation than last year – IMF A level of 10.3 percent is expectedthe Hungarian National Bank (MNB) in March inflation in her report With scenarios ranging from 7.5 to 9.8 percent, premium Hungarian government securities are expected to pay higher interest rates in the next interest period.

(Cover Photo: Public Debt Management Center [ÁKK Zrt.] Entrance at the intersection of Csalogány and Medve Streets, II. Live on July 22, 2021. picture: Laszlo Rocca/MTI)

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