Sovereign Risk and Debt Sustainability Framework for Market Access Countries and IMF Policies (SRDSF-MAC)
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- Session: CT 24.17
- Location: Shenzhen, China
- Dates: November 6-15, 2024 (2 weeks)
- Delivery method: In-person Training
- Primary language: English
Program overview and logistics
- Session No.: CT 24.17
- Location: Shenzhen, China
- Date: November 6-15, 2024 (2 weeks)
- Delivery Method: In-person Training
- Primary Language: English
Target audience and qualifications
- Target audience:
- Officials in Exim bank or CDB who play a direct role in lending decisions (loan officers, credit risk analysts).
- PBC officials engaged in designing swap arrangements with counterpart central banks in Market Access Countries (MACs).
- Officials from NDRC, China Export and Credit Insurance Corp, CIDCA, Silk Road Fund, and related agencies engaged in lending or aid.
- Officials in the Ministries of Commerce, Foreign Affairs, and Finance who are overseeing lending or aid to MACs.
- Belt and Road Initiative (BRI) officials with responsibilities related to the topics of the workshop.
- Qualifications:
- Participants should have a degree in economics or finance.
- Participants should have reasonably fluency in English (translation will not be available).
- Experience with debt sustainability analysis, or credit risk analysis would be extremely useful.
Course description and pedagogical approach
- The course presents the IMF's Sovereign Risk and Debt Sustainability Framework (SRDSF) for Market Access Countries (MACs) through presentations, discussions, and exercises.
- Core purposes of the SRDSF:
- Guide countries' borrowing decisions to match their need for funds with their current and prospective ability to service debt, tailored to their specific circumstances.
- Help assess a country's vulnerability to sovereign debt-related stress and identify policies to prevent potential stress from materializing in a timely manner.
- Where public debt related stress has already materialized, help determine whether the stress can be resolved through a fiscal adjustment and/or additional financing, or if exceptional measures including a debt restructuring are needed.
- Key instructional elements:
- Introduction to the theoretical foundations of the framework.
- Forward-looking analysis of debt and debt service dynamics under a baseline scenario and in the context of plausible macroeconomic and financing shocks.
- Presentation of standardized outputs.
- Hands-on sessions with exposure to key features of the Excel-based Sovereign Risk and Debt Sustainability Analysis (SRDSA) template (course focus is not on mastering the template).
- Group work to consider scenarios, evolution of debt vulnerabilities, and options to mitigate risks.
- A case study on a debt resolution.
Learning objectives and competencies
- Upon completion, participants should be able to:
- Understand the basic information needed for a debt sustainability analysis and explain the key inputs required to operationalize the SRDSF.
- Understand how standardized outputs of the SRDSF are produced.
- Interpret standardized outputs including:
- Summary SRDSA table.
- Debt structure charts.
- Realism flags.
- Stress tests.
- Horizon-based and overall assessments.
- Apply effective concepts, definitions, and techniques for assessing sovereign debt risks.
- Exhibit satisfactory knowledge of the MAC SRDSF framework and toolkit.
- Interpret debt sustainability analyses published by the IMF for market access countries.
- Understand options available to creditors to support debt resolution.
- Understand what will happen if a country becomes over-burdened with debt, and what crisis lenders (like the IMF) will need from creditors to be able to help with resolution.
References