Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


BUDGET 2013: DMO trims $3 bln from borrowing programme

BUDGET 2013: Debt Management Office trims $3 bln from borrowing programme

By Paul McBeth

May 16 (BusinessDesk) – The New Zealand Debt Management Office will cut its borrowing programme by $3 billion over the next two years as the government looks to clamp down on its growing interest bill and build a buffer for future shocks.

The DMO will cut its short-term Treasury bills on issue by $1 billion in the 2013/14 financial year and will reduce bond issuance by $2 billion the following year, the department said in a statement. The office expects net borrowing of $9 billion in the current financial year, a $3 billion reduction next year, and net issuance of $5 billion and $7 billion the following two years.

The government department will focus on extending the duration of the Crown’s debt portfolio, and is mulling launching two longer-dated bonds as art of this year’s programme. Maturities being considered are an April 2027 and a September 2030 inflation-indexed bond.

New Zealand debt has been an attractive option for foreign investors, with higher yields on offer in a global environment of low interest rates. Reserve Bank figures this week showed non-resident holdings of government securities were at 66 percent last month, the highest proportion since November 2008.

The government’s net debt is forecast to rise to $70.3 billion, or 27 percent of GDP, at the end of the 2017 year, from $57.9 billion in 2013. It expects to show a cash surplus of $1.8 billion in the 2016 year, though after capital requirements it will be in a residual cash deficit through the forecast period.

“This year we’re paying interest on our debt of $3 billion,” Finance Minister Bill English said in a briefing in Wellington. “We need to lower our debt to absorb the chance of another shock.”


© Scoop Media

Business Headlines | Sci-Tech Headlines


"Broad-Based Growth": GDP Rises 1 Percent In June Quarter

Gross domestic product (GDP) rose 1.0 percent in the June 2018 quarter, up from 0.5 percent last quarter, Stats NZ said today. This is the largest quarterly rise in two years. More>>


Judicial Review: China Steel Tarrif Rethink Ordered

On 5 July 2017 the Minister determined not to impose duties on Chinese galvanised steel coil imports. NZ Steel applied for judicial review of the Minister’s decision. More>>

Debt: NZ Banks Accelerate Lending In June Quarter

New Zealand's nine major lenders boosted lending at the fastest quarterly pace in almost two years as fears over bad debts subsided. More>>


Balance Of Trade: Annual Current Account Deficit Widens To $9.5 Billion

New Zealand’s current account deficit for the year ended June 2018 widened to $9.5 billion, 3.3 percent of GDP, Stats NZ said today. More>>