Course description
Organizations require adequate debt strategies that effectively handle the changing dynamics of financial issues such as declining revenues or the increased cost of borrowing. Debt management strategies are even more important for government bodies as they manage more public funds and incur liability.
What are the challenges of public debt management?
Although public debt is a crucial instrument for governments to finance public spending, significantly when raising taxes and cutting spending is difficult. However, critical challenges associated with Excessive borrowing without adequate investment planning can result in a high debt load and interest payments, which can have several negative consequences for the economy. High debt-to-GDP ratios are also a source of concern for investors since they may negatively influence the stock market and eventually result in a reduction in productive investment and employment.
What is the best strategy for managing public debt?
The development and execution of a debt management strategy is a foundation of best practices in public debt management and is based on industry standards. Having and implementing a debt management strategy enhances how rating agencies, development partners, and investors evaluate public debt practices. There are a variety of debt management strategies that the government may use depending on the peculiarity of the situation. Some of these strategies will be covered in the course content.
The Public Debt Management Strategy and Best Practices Course by Rcademy focus on Public Debt Management Strategy and how to ensure compliance with relevant financial regulations. Learners will be able to evaluate the efficacy of debt management strategies, identify areas for improvement, and make sound decisions on the cost and safety of a loan portfolio. They can thoroughly analyze debt and create an effective debt management strategy. Participants will leave the session with the tools they need to effectively manage public debt.
Upcoming start dates
Suitability - Who should attend?
At the end of The Public Debt Management Strategy and Best Practices Course by Rcademy, the participants would be able to achieve the following objectives:
- Demonstrate comprehension of the critical nature of debt management and how it fits into the broader macroeconomic framework
- Recognize the function and significance of public debt management, as well as the relationship between fiscal and monetary policy
- Demonstrate how debt ideas work and how domestic financial markets might help portfolio diversification
- Analyze the debt management operations’ strengths and shortcomings
- Make educated judgments about the portfolio’s expenses and risk
- Conduct a debt review and develop a robust debt management plan
- Comprehend the eight-step process of constructing a Medium-Term Debt Management Strategy (MTDS)
- Determine and comprehend the cost-effectiveness of a debt portfolio at a particular degree of risk
- Develop and analyze a variety of debt strategies and shock scenarios to establish the most effective strategy for the country’s conditions and the related cost-risk trade-offs
- Establish a plan for implementing a chosen debt management approach, considering country- and market-specific complexities
- Comprehend the instruments available for managing the existing debt portfolio
Training Course Content
Module 1: Introduction to Public Debt Management
- Overview of Public Debt Management
– Definition and concept
– Types of debt
– Borrowing instrument - Objectives of debt management strategy
- Analyzing cost and risk
- Macroeconomic Policies and market development
- Governance
Module 2: Theoretical Framework for Debt Management
- Introduction
- Framework for debt management
- Asset liability management
- Tax smoothing
- Implications for debt management
Module 3: Defining and Measuring Cost and Risk
- Overview of measuring cost and risk
– Choice of time horizon
– Choice of currency to measure cost and risk - Measures of Cost and Risk
– Nominal and present value
– Economic and accounting cost
– Cost measures
– Risk measures - Cost-risk trade-off
- Types of market risk
– Interest rate risk
– Foreign exchange rate risk
– Refinancing risk
Module 4: Risk Exposure Indicators
- Overview of risk exposure
- Indicators for interest rate risk exposure
– Average time to refix
– Share of debt with an interest rate - Indicators for foreign exchange rate risk
- Indicators for refinancing risk
- Benefits of risk exposure indicators
Module 5: Quantitative Analysis of Cost and Risk
- Models in Public Debt Management
- Scenario analysis
– Definition of cost and risk
– Analysis and debt data
– Time horizon and granularity - Scenario analysis model
– Model inputs
– Cash flow simulation
Module 6: Baseline and Risk Scenarios for Market Variables
- Market rates assumptions
- Baseline assumptions
– Interest rates baseline
– Market analyst’s estimates
– Macroeconomic projections - The baseline for exchange rates
- Implied forward exchange rates
Module 7: Debt Management and Macroeconomic Policy
- Introduction to debt management and Policy
– Debt management
– Fiscal policies
– Monetary policies - Macroeconomic constraints
– Fiscal policy coordination
– Monetary policy coordination - Practice coordination
Module 8: Debt Management and Market Development
- Importance of domestic government securities markets
- Domestic markets development
– Primary market
– Secondary market - Domestic markets and strategy design
- Transparency and predictability
- Design of issuance process
- Coordination with the central bank
Module 9: Governance Arrangements for Effective Strategy Development
- Legal Framework for debt management
- Objectives of debt management
– Role of the Legislature
– Role of executive - Strategy decision-making process
- Strategy implementation and accountability
Course delivery details
This course is essential and recommended to many government officials who manage or handle public funding and debt management in the country. The course is delivered using a wide range of effective teaching methodologies emphasizing the easy conversion of knowledge to practical skills.
The Rcademy course utilizes several teaching tools such as case studies, scenarios, presentations, and participant interaction. This form of learning assists the learners in getting the best form of learning experience delivered by professionals with years of experience.
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