Debt Management
Central banks still value diversification, say reserve managers
Rise in US yields does not outweigh the benefits of forex diversification, say delegates attending Nalm Americas
Mersch: no political appetite for ‘European safe bonds’
The proposal for pooled, tranched bonds is “interesting”, but the public are likely to be suspicious
Post-Brexit gilt auctions met with strong demand
Trends in gilt yields show UK debt still seen as ‘safe haven’ asset, says one analyst; others attribute strong demand in this week’s auctions to range of factors
Ugandan deputy calls for caution in forecasting deficits
Louis Kasekende warns inflation could be threatened if governments lose access to the market and are unable to meet their borrowing requirements, turning to the central bank instead
Debt deal struck but ‘heated’ discussions await Argentine president in congress
Vulture funds satisfied but Argentine president faces an ‘uphill’ battle getting deal through congress; analysts ultimately expect it to be approved, but see other challenges on the horizon
Snapshot: IMF reveals staff views on Argentina
IMF releases informal briefings compiled 2013-2015 in absence of Article IV; staff highlighted adverse effects of central bank and banking sector financing of government
Eurozone sovereign debt crisis has increased financial fragmentation, paper argues
Eurozone corporate bonds have different risk premia according to which country a company is headquartered in, paper argues; fragmentation has ‘dampened effectiveness’ of ECB policy
Denmark focuses on long-dated issuance amid low rates
National Bank of Denmark’s 2016 debt issuance strategy uses long maturities to reduce interest rate risk as low rates hold down costs; return to more normal footing after last year’s suspension
Argentina inches towards repaying debt
Montreux Partners LP and EM Ltd settle; four creditors yet to agree on removing injunction
Debt repayment problems have ‘severe consequences’ on consumption, paper finds
Quarterly consumption 30% lower when debt repayment problems arise, research suggests, while recovery after the arrears is smaller than the initial decline
Jamaican officials point to management plans as debt falls
Jamaica set to reduce debt-to-GDP ratio to 125% in pursuit of 90% target; officials from central bank and debt management branch welcome changes in past year
RBI sheds new light on debt management strategy
Central bank unveils more detailed approach to communicating debt management plans, laying out a medium-term strategy that will be updated each year
Mass walkout at RBI disrupts clearing and settlement
The majority of the RBI’s 17,000 staff took ‘mass casual leave’ today, interrupting some RBI operations, though normalcy was ‘largely’ restored after negotiations
IMF paper challenges idea of debt threshold effect
Countries with high levels of public debt can grow just as fast as their peers, provided the debt is on a downward trajectory, research finds
Argentine reserves spared as US court overturns ruling
Central bank will not have to pay creditors out of its reserves, US appeals court rules, although the decision is not meant to allow Argentina to ‘continue shirking’ its debts
RBI paper explores challenges in public debt management
Research identifies a ‘narrow investor base’ as one hurdle and considers how to encourage greater participation from retail investors in the market for government securities
Central banks cannot avoid fiscal impact, Bundesbank panellists warn
Academics and central bankers point to fiscal impact of monetary policy and lender of last resort function, raising the question of how much fiscal power central banks ought to wield
IMF senior counsel explores legal frameworks for public debt management
Senior counsel at IMF’s legal department discusses the many trade-offs involved in designing the legal frameworks underpinning public debt management
ECB’s Constâncio calls for eurozone to cut back on debt
ECB vice-president says deleveraging has proceeded slowly so far due to growth concerns; emphasises debt reduction ought to be done using diverse measures, but says primary surpluses are key
Chinese finance minister Lou Jiwei on local government debt and tax reform
Minister of finance Lou Jiwei talks about fiscal policy under China's 'new normal' and how the country plans to tackle spiraling local government debt
IMF researchers highlight high cost of unnecessary fiscal consolidation
For countries with very low borrowing costs, allowing debt ratios to fall ‘organically’ via growth is likely to be less damaging to the economy than harsh austerity, authors say
Second Hong Kong sukuk oversubscribed by 100%
Five-year Islamic bond hits home with investors, including central banks, pushing coupon below 2% – 35 basis points above US Treasuries with same maturity
IMF researchers explore central bank security issuance
Working paper finds low-income countries may struggle to issue central bank securities on account of the administrative costs and infrastructure demands
Vanoli says Argentina seeking alternatives on bonds
Argentina is looking for financial entities that are not affected by the New York judge rulings and can help the country issue new debt, central bank governor says