The Ministry of Finance informs that in 2012 following transactions were concluded on the financial market:
- Interest Rate Swap Transactions (IRS) in domestic currency,
- Foreign Exchange Swap Transactions (FX swap),
- Exchange of foreign currency.
1) Interest rate swap transactions had maturity up to 10 months and their notional amount was PLN 12.0 bn. The aim of these transactions was to distribute debt servicing costs over the time within 2012-2013. As a result of concluded transactions debt servicing costs were increased by PLN 490 m in 2012 and decreased by PLN 501 m in 2013.
Transactions were concluded without generating market risk. Expenditures on distribution of debt financing costs were lower than costs of fund acquisition.
The Supreme Chamber of Control didn't raise objections connected with purposefulness and effectiveness of these operations.
Settlement of transactions was undertaken according to Eurostat's guidelines and methodology. Information about transactions were included in the fiscal notification for 2012 delivered to the European Commission.
2) Maturity of particular transactions was not longer then two months and was established to satisfy borrowing requirements of State budget. In 2012 transactions were concluded using USD/PLN currencies with the total notional amount of USD 1.4 bn that equals of acquiring PLN 4.6 bn. These transactions consist of simultaneous exchange of one currency for another for a specific period of time with exchange rate set up at the moment of conclusion.
This liquidity management instrument allowed to use foreign currencies in order to borrow zloty.
The total cost of acquiring funds in domestic currency was significant lower than cost of alternative cost of financing with the comparable maturity.
The Supreme Chamber of Control didn't raise objections connected with purposefulness and effectiveness of these operations.
Due to the fact that these transactions included assets only, and not liabilities, they had (according to Eurostat's guidelines) no impact on the public debt level as well as on the budget deficit reported to the European Commission.
3) In 2012, similar to 2011, Ministry of Finance concluded the exchange of foreign currency resources related to the public debt and received from the EU both on the financial market and in the central bank. Total exchange on the financial markets amounted to equivalent of EUR 6.5 bn.
The Supreme Chamber of Control didn't raise objections connected with purposefulness and effectiveness of these operations.