MOF: Cyprus earns 1 billion entering international markets
Tuesday’s entrance into the international market solidifies the restoration of confidence by international investors in the Cypriot economy, the Minister of Finance Harris Georgiades said after the country managed to raise €1 billion with issuance of a 7-year bond in the international markets.
In a statement on Tuesday Mr Georgiades said that making €1 billion will allow the Finance Ministry to pay off older, more expensive and short-term domestic borrowing, which will mean lower expenditure on interest payments, and inflow of liquidity into the Cypriot market.
The interest rate was 3.875% and the performance 4%.
"I think it is a development that confirms the restoration of confidence in the Cypriot economy to international investment community, and is a major breakthrough showing in the most tangible way that the estimates of investors for the Cypriot economy are positive," he said. Georgiades added, "This development is in line with other positive developments in the last year, as was the lifting of restrictive measures, the adoption of bills pending for a long time in the House just to create the prospects for a relaunch of the economy to exit the end of the recession."
When asked how the Ministry would use the money raised, Mr. Georgiades said the main purpose is settling expensive domestic borrowing.
The Minister went on to say, “And therefore there will be immediate savings for the state in the form of less interest that they have to pay, while settling domestic borrowing with new external borrowing is a direct boost to liquidity in the economy," he added, noting that the debt whose end was short-term borrowing will now be replaced with new long-term borrowing.