Kuala Lumpur: The 20th International Monetary Fund (IMF) Public Debt Management Forum delved into strategies for governments to better navigate the challenges posed by rising borrowing costs and debt refinancing pressures.
According to BERNAMA News Agency, the forum, held on May 27-28, was a collaborative effort between the Finance Ministry, Bank Negara Malaysia (BNM), and the IMF. A primary focus of the discussions was on enhancing the liquidity of government bond markets to maintain investor confidence during economic uncertainties.
The Finance Ministry emphasized the growing role of Islamic finance in sovereign borrowing strategies, providing new avenues for countries aiming to diversify their funding sources. Finance Minister II, Datuk Seri Amir Hamzah Azizan, underscored the necessity of global cooperation in developing robust debt strategies amidst rising debt vulnerabilities and evolving investor expectations.
The event, themed ‘Managing Public Debt Amid Evolving Capital Markets’, convened approximately 200 senior government officials, public debt managers, and financial market experts from 37 emerging and advanced countries. They engaged in discussions on sovereign financing risks, market volatility, Islamic finance, digitalisation in government bond markets, and the role of primary dealers and market makers.
Tobias Adrian, IMF’s financial counsellor and director of the monetary and capital markets department, addressed the risks to global financial stability and stressed the significance of debt transparency. In his closing remarks, BNM governor Datuk Seri Abdul Rasheed Ghaffour highlighted the cooperative efforts within ASEAN, including Malaysia, to support prudent sovereign debt management and regional economic integration under the ASEAN Economic Community framework.
The forum also highlighted the experiences with digitalisation in public finance, focusing on technologies like tokenised bonds to modernise debt issuance and management processes. Experts underscored the importance of green and sustainable financing for long-term development funding.
The discussions included well-structured primary dealer frameworks to ensure market depth and investor confidence, and revisited the 2014 IMF and World Bank’s Guidelines on Public Debt Management, assessing its relevance and exploring potential future enhancements.