Greece’s Public Debt Organization Agency (PDMA) will raise up to 3 billion euros through repos from general government entities, following a decision by Alternate Finance Minister Christos Staikouras.
“By decision of the Alternate Finance Minister Christos Staikouras, the Public Debt Organisation Agency (PDMA) is granted the jurisdiction, as assignee of the Greek State, to conclude acts of sale of securities managed by the Greek State through repos with general government entities,” the finance ministry said in a statement on Tuesday.
The Organization, in cooperation with the General Accounting Office is monitoring on a daily basis over the Greek state’s cash reserves with a horizon covering one, two, three and more months. Following detail examination of the general government’s cash reserves it has been concluded that a sum of more than 3.0 billion euros could be immediately exploited by the Greek state and the most favorable solution was considered to be borrowing through repos as they offer very low interest costs (raging from 1.70 pct to 1.75 pct for a two-week period), while they do not burden both the fiscal deficit and the general government’s debt as they were considered to be intra-government debt.
The statement noted that borrowing through T-bill auctions of three-month duration currently has a 3.6 pct interest rate and could have a real benefit for the Greek state worth 900,000 euros, while a 3.0-billion-euro borrowing through repos could have a real benefit to the Greek state worth 27 million euros.