This paper investigates the dynamic impact of monetary policy shocks on fiscal space measured by government debt sustainability across 20 advanced and emerging economies from 1990-2023. Employing a Bayesian panel structural vector autoregression model with eight different fiscal measures, benchmark results demonstrate a robust relationship, where monetary tightening consistently and significantly improves government debt sustainability, especially during the second half of the sample period. Nonlinear investigations further suggest that the benchmark results are mostly driven by the periods of loose monetary policy. These findings emphasize the increasingly strong and asymmetric role of monetary policy in shaping fiscal trajectories, necessitating adaptive frameworks for effective policy coordination.