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Debt Management Responses to the Pandemic

This note aims to provide guidance on areas in which sovereign debt managers may need to respond to challenges stemming from the COVID-19 crisis. It provides some considerations for addressing strains in situations where a debt manager is faced with sharply increased government financing requirements and borrowing costs, and where sound judgment is needed to distinguish between temporary dislocations and permanent changes. Within these constraints, sovereign debt managers can help cushion a liquidity shock by minimizing near-term liquidity risk, meet rollover needs and support orderly functioning of primary and secondary government bond markets. The note presents a menu of actions that sovereign debt managers can consider in order to adapt to new circumstances.