Medium-Term Debt Management Strategy Framework

Source details

Target audience: Officials from debt management offices, ministries of finance, or central banks who deal with public debt management.
Qualifications: Participants are expected to have a degree in economics or finance, or equivalent experience.

Purpose: Build capacity in developing and implementing a sound medium-term debt management strategy (MTDS).
Framework taught: The joint IMF-WB MTDS framework.
Focus areas:
- Illustrating government cost and risk tradeoffs associated with different debt management strategies.
- Managing the risk exposure embedded in a debt portfolio, in particular, the potential variation in debt servicing costs and its budgetary impact.
Methodology:
- Analyze cost-risk trade-offs of alternative debt management strategies using the MTDS analytical tool (MTDS AT) developed by the IMF and WB.
- Take into account: composition of the debt portfolio, macroeconomic indicators, market conditions, potential sources of financing, and linkages with the broader medium-term macroeconomic framework.
- Use a selected strategy to work on MTDS implementation with an annual borrowing plan template.

Upon completion of this course, participants should be able to:

Describe the steps in developing an MTDS (the IMF-WB MTDS framework).
Analyze the central government debt portfolio to identify the costs and risks inherent in the existing debt.
Formulate different market risk scenarios (baseline and shock scenarios), adapting them to the country’s specific situation.
Identify and assess various financing strategies under these scenarios and compare the cost/risk trade-offs involved.
Use the quantitative MTDS analytical tool that accompanies the MTDS framework.
Present the results of the analysis in a manner that enhances its value for policy purposes.
Formulate a strategy that is in line with debt management objectives.
Design an annual borrowing plan for the first two years of the strategy period.