IMF Working Papers

Restructuring Domestic Sovereign Debt: An Analytical Illustration

By David A. Grigorian

February 3, 2023

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David A. Grigorian Restructuring Domestic Sovereign Debt: An Analytical Illustration, (USA: International Monetary Fund, 2023) accessed September 19, 2024

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Summary

Sovereign domestic debt restructurings have become more common in recent years and touched upon a growing share of total public debt. This paper offers a simple framework for policymakers to think about the decision whether to restructure domestic sovereign debt as part of an effort to reduce overall public indebtedness. It also highlights a rather wide range of technical, legal, and operational issues a sovereign may face while restructuring domestic debt. As expected, factors such as debt reduction required to achieve sustainability, fiscal savings from a restructuring, and economic costs of a restructuring are key inputs into the decision making regarding a restructuring, but so are factors such as the composition of debt, financial stability costs, and crisis preparedness, all of which are discussed in the paper.

Keywords: Domestic debt restructuring, Net debt relief, Sovereign debt

Publication Details

  • Pages:

    29

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

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  • Series:

    Working Paper No. 2023/024

  • Stock No:

    WPIEA2023024

  • ISBN:

    9798400232541

  • ISSN:

    1018-5941