Latvia's Economic Response to Covid-19
Medium Term Funding Requirement and Borrowing Strategy
Borrowings in international capital markets will continue to represent the most significant share of the overall borrowing
volume.
Goal
Principles
Medium Term Borrowing Strategy
Ensure timely and full availability of financial resources for
covering the financing requirement, by maintaining
continuous borrowing opportunities in the international and
domestic financial markets on optimal terms and conditions
Flexibility (towards timing, maturities and currencies)
Achieve balance between risks and costs
Consistency and transparency to markets
General Financing
Requirement
Central Government Budget Balance
Net Lending
Other Flows
at the Treasury`s Accounts
Outstanding Central Government
Debt Redemptions
(domestic and external)
Pre-funding
Strategy
For
Refinancing
Debt
Borrowing Instruments (BASE scenario)
Benchmark issuances in internatioanal capital markets
Regular auctions in domestic market in larger gross volumes
Loans from international financial institutions (for example EU )
Alternative Instruments
Niche market instruments (JPY, CHF, etc.)
Private placements (reverse enquiries)
Loans from other international financial institutions
• T-bills in domestic market
Central Government financing estimation
(ACTUAL scenario 2021-2023, EUR million)
2021
Jan-Feb|Mar-Dec
28-February-2021
2021 2022 2023
Central government
budget balance, net
lending and other flows
63
-3 173
-3 110
-989
-448
Outstanding central
government debt
-1 076
-338
-1 414
-707
-1 593
redemption
Of which:
Domestic debt repayment
External debt repayment
-88
-988
-4
-92
-624
-519
-334
-1 322
-83
-1 074
Total
-1 014
-3 510
-4 524
-1 696
-2 041
Gross borrowing
439
2 983
3 422
1 650
2 000
Of which:
International issuance
0
2 500
2 500
1 000
1 400
Note: Indicative in the planned period, the estimated borrowing volume is based on a number of
contingencies, subject to Covid-19 fiscal impact and government decisions on measures for mitigation of
spread of Covid-19 and support for the economy
The borrowing volume could change due to Covid-19 negative fiscal impact and necessity to provide financing for additional
Covid-19 mitigation and support measures, subject to further pandemic development and government decisions
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