The Hungarian Debt Management Agency (AKK) said the 2025 financing plan was fulfilled on a prorated basis in H1, with 96% of the full-year net issuance target completed by end-June.

AKK noted strong performance across all market segments, supported by solid demand in both the HUF institutional and retail markets. On the HUF institutional market, 75% of net and 50% of gross planned auction issuance was executed. In the retail segment, 71% of the gross issuance target was completed despite substantial repricing and portfolio rebalancing.

Following a revision of the cash-flow-based government deficit in June, the debt manager adjusted its financing plan and covered the additional funding need with FX bond issuance. The foreign currency issuance, including a €2.5bn transaction in January and a $4bn deal in June, was deemed successful despite volatile global markets. Net FX financing reached 148% of the annual plan by mid-year.

The average maturity of Hungary's central government debt stood at 5.6 years at the end of June, unchanged from end-2024, with domestic forint debt averaging 4.1 years and FX debt 9.0 years. The 90-day moving average stood slightly below the 5.4-year benchmark.

The FX debt ratio stood at 31.4% on a spot basis following the June FX bond issue, but it could return to the 30% benchmark by the end of 2025 due to redemptions and planned buy-backs.

Household holdings of government securities increased by HUF397bn (€1bn) in January-June, reaching HUF13.3 trillion. Retail demand remained strong, with the share of the popular variable-rate PMAP falling to 37%, down from 59% at end-2024, as investors shifted towards fixed-rate (FixMAP) and bonus (BMAP) bonds.

Redemption rate of PMAP series, repriced in 2025, amounted to 32% relative to the stock at the beginning of the year. There were no large-scale redemptions in other retail government securities. Hungarian retail investors cashed in on hundreds of billions of forints in interest on bonds bought during the inflation peak in 2023.

The inflation exposure of the central government debt declined from 13.3% to close to 8.3%.

On the HUF institutional market, net issuance reached HUF1.34 trillion, or 65% of the revised full-year target. Gross issuance totalled HUF2.0 trillion with auctions showing strong investor interest and an average bid-to-cover ratio of 2.04. The total stock of T-Bills rose by HUF477bn to HUF2.9 trillion.

AKK also announced plans to issue Panda bonds in China in H2, depending on funding needs. Maturities of existing FX bonds, including a  €1bn bond and smaller JPY and CNY tranches, are also scheduled for autumn and with a planned FX bond buyback is also set to reduce the FX debt ratio in 2026.

The debt manager reaffirmed that the government’s debt financing remains stable across all pillars and said it continues to manage the debt structure in line with market conditions and benchmark targets.