The Ministry of Treasury and Finance plans to provide a total debt service of 505.9 billion liras, with 293.5 billion liras in principal and 212.5 billion liras in interest. The announcement of “Treasury Financing Program: Developments for 2021 and Forecasts for 2022” was published on the website of the Ministry. Accordingly, the Ministry foresees a total debt service of 505.9 billion liras, of which 293.5 billion liras is principal and 212.5 billion liras is interest. It is planned that 385.5 billion liras of the debt service will be done as domestic debt and 120.4 billion liras as foreign debt service. It is envisaged that 319.7 billion liras of the domestic debt service will consist of the payments to be made to the market, and 65.8 billion liras from the sales made to public institutions through non-competitive offers. It is expected that the total of non-borrowing resources to be obtained as a result of cash-based primary balance, privatization revenues, 2/B sales revenues, recurring and guaranteed debt returns with resources transferred from the Savings Deposit Insurance Fund and the use of cash/bank is expected to be 7.9 billion TL. It is aimed to provide financing for 11 billion dollars next year through bond issuances from international capital markets. In line with these, it is envisaged that a domestic borrowing of 397.1 billion liras will be made in 2022. Taking into account the appropriate instrument and maturity combination in order to ensure that the borrowing in the next year is predominantly in lira, to reduce the domestic foreign currency debt stock, to issue other currencies besides the dollar in international markets in order to ensure market diversity, and to ensure the optimal management of interest expenses, The main elements of the borrowing strategies to be implemented are to keep the share of the bills of which interest will be renewed every month and the bills with maturity less than 12 months at a certain level, and to keep the cash reserves strong in order to reduce the liquidity risk that may arise in cash and debt management.
Domestic borrowing transactions issuance plan for the next year
In addition, in 2022, it is planned to continue the domestic borrowing transactions and the issuance of fixed coupon “indicator bonds” in Turkish lira, within the framework of market conditions. Turkish lira denominated coupon and non-coupon bonds and bonds, variable-term variable coupon bonds, long-term inflation-indexed bonds can be issued depending on the redemption schedule and market conditions. The issuance of gold bonds and gold-based lease certificates, which started in October 2017, is targeted to continue in 2022. On the other hand, the strategy of gradually reducing domestic FX borrowings this year will continue in 2022. While it is anticipated that the issuance of Turkish lira-denominated lease certificates will continue in 2022, additional requests from market participants will also be evaluated. In order to eliminate the temporary mismatch that may be observed between monthly cash inflows and outflows, short-term Treasury bills and financing instruments in the ‘Regulation on Financing to be Provided through Money Market Cash Transactions’ can be used. In order to ensure a balanced distribution of debt service between periods and to increase price efficiency in the secondary market, exchange and buyback auctions will be held within the framework of market conditions. Details of the tenders will be announced to the public at least one business day before the tender day.