Background

Empirical studies by the IMF and World Bank indicated that domestic sovereign debt markets have been found to provide resilience to shocks in times of financial turbulence and, by expanding financing opportunities and diversifying risk-return preferences, lifting long-term growth. Recent financial crises, including the turmoil in financial markets caused by the coronavirus pandemic, have shown that efficient LCBMs can increase financial resilience by mitigating currency risk, which is often a source of financial distress (World Bank, 2021). However, countries in the MEFMI region are in different levels of development along the various dimensions of the domestic market building blocks, some with weak institutional frameworks and shallow financial sectors.

Against this background, MEFMI will offer a regional workshop on Local Currency Bond Market Development to discuss the broad guidelines and general principles to develop LCBMs, the related specific reforms which involves a broad range of stakeholders and policymakers.

Objectives

The course is designed to strengthen participants’ knowledge on the building blocks for LCBM development and sequencing of reforms to develop these markets. Provide a platform for participants to learn from experiences and good practices of peer countries.

Course Content

The course will cover the following topics:

• Importance, benefits and recent developments in LCBM development

• Money Market

• Primary Market

• Secondary Market

• Investor Base

• Financial Market Infrastructure

• Legal and Regulatory Framework

• Sequencing of reforms, interlinkages across LCBM building blocks

Target Audience

The course is targeted at middle to senior officials in the area of domestic debt management and financial markets departments in Ministries of Finance, Economic Planning and Development and Financial Markets departments of Central Banks.