By Mercy Kumbatira
June 2008
Preamble
The failure by domestic debt managers to formulate an appropriate borrowing strategy has a number of problems which include bunching of payments, which cause cash flow difficulties, a maturity profile which is short term and monetisation of debt. Once policy makers have assessed the government’s fiscal sustainability, debt managers need to formulate a credible borrowing strategy. For this to happen, they need to make an accurate assessment of both the borrowing requirements for government and for monetary policy and also the likely take-up of government securities by the market. This is also only possible when there is close coordination between the main institutions that are involved in economic policy.