The Bahamas: Technical Assistance Report-Domestic Local Currency Bond Market Development
Technical Assistance Reports, July 8, 2024
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- The Bahamas: Technical Assistance Report-Domestic Local Currency Bond Market Development
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Bibliographic details
- Published: July 8, 2024
- Series: Technical Assistance Reports
- DOI: https://doi.org/10.5089/9798400279560.019
Overview and Context
- The Bahamas has a strong foundation for developing the local currency bond market (LCBM), benefitting from macroeconomic stability, and favorable fiscal and borrowing plans.
- The government views domestic capital market development as crucial for rebuilding economic buffers and fostering financial market development.
- An IMF/CARTAC technical assistance mission visited The Bahamas in March 2023 to support the LCBM development.
Mission scope and assessment
- The mission assessed the current stage of the sovereign debt market and formulated policy recommendations for each of the six building blocks outlined in the Guidance Note for Developing Local Currency Bond Markets.
- Key assessment emphasis: potential to shift funding from non-concessional external borrowing to the domestic bond market to facilitate a more robust yield curve and deeper benchmark issuances.
Key findings
- Significant potential exists to shift funding from non-concessional external borrowing to the domestic bond market.
- Such a shift would facilitate:
- A more robust yield curve.
- Deeper benchmark issuances.
- The Bahamas benefits from macroeconomic stability, and favorable fiscal and borrowing plans that support LCBM development.
Key recommendations
- Transition to a competitive auction system, allowing market prices to clear a fixed volume on offer.
- Enhance communication with market participants, including through a formal investor relations strategy, and with relevant stakeholders to improve credibility, transparency, and investor appetite.
- Implement reforms sequentially, initially focusing on eliminating the most critical bottlenecks to market development.
Thematic focus areas (as reflected in subject keywords)
- Financial institutions
- Financial markets
- Government debt management
- Government securities
- Public financial management (PFM)
- Securities markets
- Treasury bills and bonds
International Monetary Fund. The Bahamas: Technical Assistance Report-Domestic Local Currency Bond Market Development, July 8, 2024.
Content in this bundle
- Preface — IMF/CARTAC mission on The Bahamas domestic LCBM