A Primer on Managing Sovereign Debt-Portfolio Risks

Thordur Jonasson and Michael Papaioannou

No 2018/074, IMF Working Papers from International Monetary Fund

Abstract: This paper provides an overview of sovereign debt portfolio risks and discusses various liability management operations (LMOs) and instruments used by public debt managers to mitigate these risks. Debt management strategies analyzed in the context of helping reach debt portfolio targets and attain desired portfolio structures. Also, the paper outlines how LMOs could be integrated into a debt management strategy and serve as policy tools to reduce potential debt portfolio vulnerabilities. Further, the paper presents operational issues faced by debt managers, including the need to develop a risk management framework, interactions of debt management with fiscal policy, monetary policy, and financial stability, as well as efficient government bond markets.

Keywords: WP; interest rate; exchange rate risk; debt manager; Public Debt Management; Financial Risk; Foreign Exchange Hedging; Government Securities Markets; foreign currency; short-term debt; debt portfolio; borrowing cost; portfolio risk; bond issue; Government debt management; Debt management; Bonds; Credit risk; Global (search for similar items in EconPapers)
Pages: 133
Date: 2018-04-06
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Citations: View citations in EconPapers (4)

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