Foreign Investors Hold Czech Bonds Worth Over a Trillion Crowns for the First Time

Foreign investors held Czech government bonds worth more than a trillion crowns for the first time by the end of 2023. According to data released by the Ministry of Finance, their share of all issued bonds increased to 35.4 percent, up from 28.79 percent at the end of September. Jakub Seidler, the chief economist of the Czech Banking Association, pointed out that the fluctuation at the end of the year was one-time, caused by operations between Czech banks and their foreign parents.

At the end of the year, foreign investors held Czech state bonds worth 1.05 trillion crowns. In a year-on-year comparison, it was 350.7 billion crowns more. The total indebtedness of the Czech Republic through bonds reached 2.96 trillion crowns on December 31.

The share of bonds held by foreign investors increased by 8.65 percentage points to 35.4 percent year-on-year. Since the beginning of 2022, it has been steadily stable and has moved between 27 and 29 percent, while the volume of bonds held by foreign investors has gradually grown in connection with the growing state debt of the Czech Republic.

Seidler informed us that the fluctuation at the end of last year was one-time. It was caused by the methodological capture of operations between Czech banks and their foreign parents. The Ministry of Finance also pointed out the methodological cause, according to which the captured change records a change in legal ownership. In contrast, the economic ownership of the bonds remained with Czech banks.

According to data from the Ministry of Finance, state bonds worth 162.7 billion crowns are due this year. The state replaces due bonds with the issuance of new ones. This year, according to the Financing Strategy and State Debt Management, the Ministry of Finance wants to offer short-term and medium-term bonds worth 300 to 400 billion crowns on the market this year.