CYPRUS: Gov't aims to beef up cash reserves from â‚¬200m to â‚¬500m

The government wants to build up its cash reserves from EUR 200 mln at present to about 500 mln by the end of next year, representing half the amount it intends to hold in liquid assets and to reduce the risk factor related to foreign borrowing.

In a confidential report to parliament, the Ministry of Finance said its strategy for medium term management of public debt, estimated at EUR 18.5 bln, should start to decline due to the improved public finances, but that risks will remain even after the conclusion in March 2016 of the economic adjustment programme agreed with the Troika of international lenders.
According to the document, the biggest risk is that 40% of debt, or about EUR 7.5 bln, matures over the next six years.
The aim is for short term debt (up to 12 months) to represent EUR 750 mln or 5% of the total, while long term debt (more than a year) to be managed so that maturities in 2015 to reach EUR 1.3 bln, between 2016 and 2018 a further 1.75 bln and from 2019 onwards 2.2 bln.
Other risks include the EUR 3 bln in guarantees given by the government to various public entities as well as the adjustment programme itself.
The report also points to risks related to raising EUR 500 mln from privatisations within the next two years as included in the programme, due to potential reactions by stakeholders.
The first of the public utilities to be privatised is the Cyprus Ports Authority, with the process expected to get underway by the end of 2015, the same timeframe announced for the selection of an advisor for the privatisation of the telecoms giant Cyta.
In all, the government aims to raise EUR 1.4 bln from privatisations and sale of state-owned assets by the end of 2018.