Formalizing a Debt Management Strategy
In short, central government debt management can be defined as the process of establishing and executing a strategy in order to meet the debt management objectives. Undoubtedly, the development of the strategy is the most important debt management...
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| Format: | Policy Note |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2005/12/16403910/india-formalizing-debt-management-strategy http://hdl.handle.net/10986/12962 |
| Summary: | In short, central government debt
management can be defined as the process of establishing and
executing a strategy in order to meet the debt management
objectives. Undoubtedly, the development of the strategy is
the most important debt management decision. Given the
market constraints, it is the strategy document that decides
on issues such as the level of exposure to foreign currency
risk, desired maturity structure of the debt, level of
interest rate sensitivity, whether and how much of the debt
should be indexed to inflation, and the plan for development
of the domestic debt markets. If the government has chosen a
strategy that turns out to be too risky, or, at the other
end of the spectrum, too costly in order to avoid any risk,
it will affect the budget outcome much harder than any
misprized and/or badly timed debt management transaction.
This paper will discuss the appropriate organizational
arrangement, internal procedures and regulatory framework
for a successful and sustainable development of debt
management strategies. |
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