OECD Sovereign Borrowing Outlook 2014

image of OECD Sovereign Borrowing Outlook 2014

Each year, the OECD circulates a survey on the borrowing needs of member countries. The responses are incorporated in the OECD Sovereign Borrowing Outlook to provide regular updates of trends and developments associated with sovereign borrowing requirements and debt levels from the perspective of public debt managers. The Outlook makes a policy distinction between funding strategy and borrowing requirements. The central government marketable gross borrowing needs, or requirements, are calculated on the basis of budget deficits and redemptions. The funding strategy entails decisions on how borrowing needs are going to be financed using different instruments (e.g. long-term, short-term, nominal, indexed, etc.) and distribution channels.

Accordingly, the OECD Sovereign Borrowing Outlook provides data and information on borrowing needs and funding policies for the OECD area and country groupings, including gross borrowing requirements, net borrowing requirements, central government marketable debt, funding strategies and instruments and distribution channels.



Challenges for public debt management

The use of, and exit from, central bank asset purchase programmes

Sovereign debt management offices need to deal with the challenges of changes in unconventional monetary policy; a tightening of fiscal policy; and market dynamics associated with the various exit paths from Quantitative Easing (QE).The complications generated by the increase in global volatility and long-term rates associated with confusion about the timing of the QE exit and tapering by the US Federal Reserve, constitute additional challenges for government issuers. This global volatility-cum-yield shock provides arguments for assessing carefully the potential impact of exit strategies and procedures on debt management and sovereign borrowing decisions.The challenges for debt managers during the early stages of the monetary and fiscal exit strategy are framed against the question that bedevils almost every government: how to continue to raise smoothly new funds at a reasonable cost, while managing rollover risk and the risks associated with a still growing debt stock.



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