Improving Public Debt Management
In the OIC Member Countries
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through the central bank may be put in place, restricting direct financing to exceptional
emergency situations and a limited time period.
(3) Borrowing and Related Financial Activities
To fulfill the projected borrowing requirements, marketbased instruments such as auctions,
syndication, tap issuance or retail issuance might be used. Moreover, it is recommended to
publish an annual borrowing plan for domestic and external borrowing. This borrowing plan
shall distinguish between wholesale and retail markets, and other sources of funding. A
borrowing calendar including debt instruments, issue dates and indicative borrowing amounts
for wholesale securities may be released regularly. It is usually advisable that the general
public shall have access to information on procedures for domestic and external borrowing, as
well as the terms, conditions and criteria for accessing primary wholesale and retail markets.
The debt management entity may regularly discuss its assessment on borrowing plans and the
development of (domestic) markets with market participants. Similarly, an assessment of the
most advantageous and costeffective terms and conditions for external borrowing may be
prepared. Internal documented procedures for all external borrowing should be easily
accessible and regularly reviewed. All relevant financial terms of the loan transaction shall be
registered into a debt recording system, preferably in a timely manner. Legal advisers may be
consulted during the negotiation process and may authorize the legal arrangements.
To facilitate the process, internal documented procedures for the approval and provision of
credits, and for the approval, issuance and monitoring of loan guarantees should be easily
accessible. The procedures may require an assessment of credit risk before the issuance of
credits and loan guarantees. Additional procedures regarding derivative transactions may
demand that certain derivative transactions are regularly supervised and that the counterparty credit risk is addressed.
(4) Cash Flow Forecasting and Cash Balance Management
The central government shall provide databased and easily accessible aggregate forecasts of
cash inflows and outflows, preferably at a monthly basis, as well as cash balances on central
government bank accounts for the budget year. Ideally, such monthly cash flow forecasts
include weekly predictions. Moreover, the float shall be kept within the ranges proposed by
central government policies through appropriate transactions, e.g. issuance and buyback of TBills. Forecasts of cash balances may be taken into account for the planning of shortterm
instrument issuance, and surplus cash shall be invested by the central government within
adequate credit risk limits.
(5) Debt Recording and Operational Risk Management
It is advisable that easily accessible manuals for the processing of debt service payments, data
recording and validation, and documented procedures for controlling access to the central
government’s debt recording and management system exist. Moreover, such manuals shall be
reviewed regularly. Internal payment orders are recommended to be prepared and issued
electronically, while debt data may be independently verified each year by external auditors.
Backup systems for debt recording and management can be created, safely preserved and
regularly checked. Central government liabilities and all debtrelated transactions, including
past debt restructuring and relief actions, should be consistently recorded. It is recommended
that government securities are stored in electronic form in a safe and continuously updated
central registry, which is regularly audited regarding internal controls and the management of
operational risk.