New treasury bonds. Ministry of Finance removes WIBOR from offer

In June, the sale of Treasuries suddenly increased from PLN 2.3 billion to PLN 14 billion. The interest of Poles in this way of saving has never been so important
The government is counting on the fact that the frozen funds will help control high inflation faster. Therefore, it is trying to make the offer more attractive and will introduce new bonds from August 1
It will replace existing securities that have given interest rate dependent on WIBOR. In this way, the Ministry of Finance will become independent of the problematic indicator
Experts analyzed all available bonds and explained the most profitable bonds
More such information can be found on the home page of Onet.pl

a few days ago The Ministry of Finance announced changes to the bond offer Addressed to ordinary citizens who have been frustrated by the offer of bank deposits in recent months, and have been very keen to invest their money in government treasury bills. It’s more of a surprise Withdrawal of three-year bonds, interest depends on the WIBOR rate (This same is the main criterion for interest rates on loans).

The interest rate on these three-year bonds in July was 6%. For the first six months, then every six months, interest is calculated based on the six-month WIBOR rate. At the end of July, it was about 7.3 percent. This is more than what banks offer on most deposits.

However, as of August 1, WIBOR-based bonds will no longer be available, and They will be replaced by three-year bonds at a fixed rate of interest throughout the saving period at the level of 6.5%. This is exactly the main interest rate of the National Bank of Poland.

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At first glance, you might not think that this is a good change. Although the new bonds will give a 0.5 percentage point higher interest in the first six months, the WIBOR bonds for the next six months could gain 0.8 percentage points. more. Similarly, in the next two years, provided that interest rates remain at the current high level.

However, experts point out that the devil is in the details and that the change served by the Treasury may be more beneficial to savers in the long run. They note that the rulers have a specific purpose in this.

What is more profitable?

If someone is thinking of investing money in 3-year bonds and does not know whether to rush or wait for the new offer, then he should answer the question: what will happen with interest rates in Poland? What do the experts say?

– If interest rates continue to rise or remain high for a long time, it is better to hurry up and buy three-year bonds in July. However, in my opinion, we are in the lead with NBP interest rates. There are even voices that there will be no further rate increases, and there may be a first rate cut next year. In such a situation, new bonds seem to be more beneficial Expander expert Jarosław Sadowski explains in an interview with Business Insider Polska.

Also, the forecasts of the Polish Economic Institute (PIE) assume that The July price hike was the last time.

– For a long time, the current interest rate should be applied, which in the case of the prime rate is 6.5%. After that, the first cut can be expected in the third quarter of 2023, Jacob Rybacki, a PIE analyst, predicts.

In an interview with Business Insider Polska, he noted that WIBOR is currently pricing in one more rate hike, so even in the coming months, the index on which the three-year bonds so far depends may fall slightly. add that The advantage of a new fixed rate bond is that you know in advance what the interest is and how much you can earn.

The alternative is inflation bonds

A three-year freeze of funds does not suit everyone. Therefore, there is also the option to invest the money in three-month, one-year and two-year bonds. The first option is by far the least profitable, since the interest is only 3%. every year. The one- and two-year bonds currently carry double the interest at the headline NBP level (In the case of two years, a small bonus of 0.25 percentage points is added to the NBP rate).

The savings offer submitted by the Ministry of Finance is complemented by four- and ten-year bonds They give interest based on inflation. They make a profit of 1 and 1.25 percentage points, respectively. higher than the price index. Six-year and 12-year bonds have a similar structure, although they are only intended for people who benefit from the Family 500 Plus program.

The Finance department tempts you with a variety of options. What are the most interesting? Experts point out that it depends on how long we can freeze the funds. If profitability is the most important criterion, Inflationary bonds are the most attractive.

We do not know how long the fight against high inflation will continue. It may not be over soon, so such links look attractive – Sadosky points out. For some time, rates of return may be close to double digits.

– Inflation should peak in August around 16%, so there is not much room for further increase in the indicator. Then you should fall, but anyway Until May 2023 can contain two-digit values – says Rybacki.

The PIE expects the average value of inflation this year to be around 13.5%. Next year it may drop to 8.5%, and in 2024 it cannot be excluded that it will exceed 5%.

Even if inflation drops more noticeably sometime next year, it won’t be a long-term relief. Once the government’s anti-inflation shield is over, the index could automatically jump by about 2.5 percentage points. – PIE expert notes.

He admits that inflation is unlikely to fall below interest rates over the next three years. This means that Real interest rates will remain negative for a long time to come.

Why is the Ministry of Finance manipulating the offer?

It appears that in light of the end of interest rate increases and from the perspective of cuts in the coming year, the introduction of a fairly high fixed rate rather than the WIBOR rate is not profitable for the Ministry of Finance. You will incur higher costs. So what is the purpose?

Jacob Rybacki thinks it’s that way Governors may want to keep citizens interested in bonds, especially long-term bonds. More frozen funds for longer periods means less consumption. As a result, it should have a positive effect on reducing inflation.

An unexpected change can also have an additional purpose. It is located around Getting rid of the problematic WIBOR indicator. The Prime Minister announced it a few months ago From 2023, the rate will be removed from loan agreements A different and better index will be used to determine the loan interest rate.

Mateusz Morawiecki said: – We have long appealed to banks to develop an appropriate, more transparent, transparent and equitable mechanism for calculating loan costs than WIBOR.

Record interest in bonds

An interesting bond offering for savers has already brought the effects expected by the authorities. The latest NBP data confirms that billions of zlotys are disappearing from circulation. Even the Ministry of Finance says about him Standard Bond Sales. only in june The Poles have invested more than 14 billion zlotys in it.

In June, a record for retail Treasury sales was broken.

– I think bonds will still be very popular. Instead of merging with bank deposits, bonds are more suitable. More and more Poles are learning that this is how they can keep money safely. I myself received a lot of questions from friends and family, which they did not ask me about before – admits Yaroslav Sadovsky.

Jacob Rybacki is more skeptical about the possibility of breaking new records for bond sales. It indicates that we are at the peak of inflation and wage growth. In the coming months, it may happen that the income of Poles will grow more slowly, family budgets will be burdened with high costs for servicing loans and The pool of savings that could be put into bonds would also be smaller.

Damian Somsky, Journalist at Business Insider Polska

Echo Richards

Echo Richards embodies a personality that is a delightful contradiction: a humble musicaholic who never brags about her expansive knowledge of both classic and contemporary tunes. Infuriatingly modest, one would never know from a mere conversation how deeply entrenched she is in the world of music. This passion seamlessly translates into her problem-solving skills, with Echo often drawing inspiration from melodies and rhythms. A voracious reader, she dives deep into literature, using stories to influence her own hardcore writing. Her spirited advocacy for alcohol isn’t about mere indulgence, but about celebrating life’s poignant moments.

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