* Debt agency sees HUF 170 bln net govt bond issuance
* Hungary plans EUR 1.5 bln FX bond issues next year
(Adds more detail, comments)
By Krisztina Than and Sandor Peto
BUDAPEST, Dec 17 (Reuters) - Hungary on Thursday outlined plans to come off IMF aid next year and return to market financing frozen by the financial crisis, projecting net local bond issues of 170 billion forints ($876.5 million).
The government also plans 1.5 billion euros worth of foreign currency issuance mainly to finance expiring debt, with some of that possibly coming in the first quarter of 2010, the state debt management agency AKK said on Thursday.
It does not plan to draw down further funds from a $25.1 billion loan granted by the IMF, the EU and the World Bank in the midst of the crisis last year, but does plan to use some of the funds already placed at the central bank from the package.
Hungary has stabilised its finances this year after it averted financial collapse in October 2008 with the help of international lenders.
Its budget deficit is targeted at 3.8 percent of gross domestic product next year, one of the lowest in the European Union, but there are big upside risks to the deficit and elections coming in April or May 2010 increase uncertainty.
But high debts continue to make it vulnerable and the agency said it would adopt a flexible approach to forint debt auctions, adjusting offers to domestic demand as global markets continue to be fragile.
"In this situation, all (sovereign) issuers try to rely on domestic savings," AKK deputy CEO Andras Borbely told a news conference.
"We expect foreigners' Hungarian bond holdings to stagnate...we have estimated the amount of domestic savings which can be invested in Hungarian government debt and we have adjusted our forint issuance plan to that."
IMF LEFTOVERS
The government has drawn down 12.8 billion euros worth of funds from the IMF-led package so far in 2008 and 2009, and there is still 3 billion euros deposited at the central bank.
Including funds drawn down directly by the bank itself, the total amount of drawdowns is 14.2 billion euros so far.
The 3 billion euros in deposits include unused funds set aside for helping out banks and the AKK said it plans to use more than half of this for debt financing next year.
Hungary's total net financing need is expected at 982 billion forints next year, after a planned total 950 billion forints in 2009.
The 2010 net financing need includes a cash-flow budget deficit of 870 billion forints, and the impact of EU transfers which reduce the state's liquid funds by 111 billion forints.
Discount treasury bill issues will exceed expiries by about 150 billion forints next year, the AKK said.
Borbely said the average amount of government bonds to be sold at next year's auctions will be about the same as in the past months.
(Reporting by Krisztina Than/Sandor Peto; editing by Patrick Graham)