Managing Foreign Exchange Rate Risk: Capacity Development for Public Debt Managers in Emerging Market and Low-Income Countries
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Summary:
This paper presents some sound practices for foreign-currency risk management in developing countries and outlines instruments for managing sovereign debt portfolio currency exposures. Adoption of a debt management strategy with well-defined targets for foreign exchange risk is a critical element of public debt risk management. To this end, public debt managers often need to face with complex strategic and operational matters related to public debt hedging practices, including the use of derivatives. In this context, we highlight the main institutional challenges in the management of foreign exchange risk in sovereign debt portfolios and discuss the overall implementation of a foreign exchange risk-management strategy.
Series:
Working Paper No. 2024/167
Subject:
Asset and liability management Currencies Debt management Debt strategy Emerging and frontier financial markets Exchange rate risk External debt Financial markets Financial regulation and supervision Foreign currency debt Government debt management Money Public debt Public financial management (PFM)
Frequency:
regular
English
Publication Date:
August 2, 2024
ISBN/ISSN:
9798400287107/1018-5941
Stock No:
WPIEA2024167
Format:
Paper
Pages:
32
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