NTMA says $30 billion in cash piles will protect state from rising debt costs


The rising interest rate environment will not significantly increase the Irish government’s debt servicing costs over the next two years thanks to a €30 billion cash pile, said the head of the National Treasury Management Agency (NTMA).

At its peak, when the agency released its 2022 semi-annual business update and 2021 annual report, NTMA Chief Executive Frank O’Connor said Ireland’s debt-servicing costs will rise from 2022 onwards, but there is a significant cushion around which Impact of higher costs to mitigate lending rates.

“This comes as a result of our multi-year program to pre-fund and secure long-term the benefits of unprecedented low interest rates, giving us more than €30 billion in cash and a long average tenor of 10.7 years, one of the longest in Europe. ”

So far in 2022, nearly 60 percent of bonds in the bond market have been closed for the year before the recent interest rate move, he said.

As a result, the NTMA expects the average interest rate on Ireland’s debt to remain near a recent low of 1.5 per cent this year and that interest bills for 2022 will remain at similar levels to 2021.

“We are also benefiting from continued robust investor demand for our debt securities and a positive trend in rating action, reflected in three major rating agency upgrades in the first half of 2022,” he said. NTMA says $30 billion in cash piles will protect state from rising debt costs

Fry Electronics Team

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