Exclusive: Latvian State Treasury Director: Remaining Flexible in Borrowing Strategy

7 June 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – Latvia is planning to fund itself on capital markets for the rest of 2024,while maintaining flexibility, according to Kaspars Āboliņš, Director of the Latvian State Treasury.

In an interview with Econostream on June 5 (transcript here), Āboliņš said, ‘As regards to the remainder of the year, we will continue to raise funding in capital markets, but remain flexible in our borrowing strategy, timing, market and instruments.’

In May the Latvian Treasury had returned to the USD market by placing a $1.250 billion 10-year bond that resulted in an effective rate lower than the cost of funding in euros, he said.

‘We have been monitoring other (niche) markets as well, because there is a potential to diversify the investor base, but such borrowing still should be financially beneficial’, he said.

The Latvian Treasury has completed approximately 75% of its funding needs for this year, he said, although ‘the funding needs may change during the course of the year. Therefore, we always maintain flexibility to respond to the actual needs and the situation.’

Asked about green issuance, Āboliņš said that the Treasury has been taking into account the increasing demand for sustainable debt instruments from investors.

‘[We] see ourselves returning with a new sustainable bond in the medium-term, but such issuances are always subject to providing credible and eligible budget expenditures’, he said.