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Debra C.

von Koch
Government Debt Issuance & Management Program
International Financial Crisis
&
Global Economic Recession
Strategies and Tactics
For Emerging Market Countries

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OTA MISSION

Strengthen public financial management


and financial institutions
in developing and transition countries

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Real Economy
• Impact of crisis reaching EM countries at
varying speeds, with differing results
• Economic growth contracting more than
forecast
– Demand for goods/services
– Remittances
– FDI
– Commodity prices & exports
– Tourism receipts

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Government Finances

• Cash Flow Problems


– Revenues
– Countercyclical/social spending
– Interest rates on government debt
= Fiscal Gaps
• IFI Credit

• Prior Reform Efforts


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Financial Markets

• Reduced Hard Currency Inflows

• Depreciating Local Currencies

• Declining Official Reserves

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Financial Markets -2

• Low Demand for New Debt

• High Concentrations Foreign-Currency


Denominated Debt/High FX Risk

• Short Maturity Profile/High Rollover Risk

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Response to Challenges

• Accelerate Domestic Debt Market


Development to Support:

– Fiscal stability
– Monetary policy transmission
– Broader capital market development

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Response to Challenges -2

• Update Debt Strategies

• Debt Restructurings

• Improve Cash Forecasting/Management

• Improve Risk Analysis/Management

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Response to Challenges -3
• Implement Reforms to Attract Domestic
Savings

• Enhance Transparency and Market


Communication
– Investors
– Coordination fiscal and monetary policies

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Thank you!

Debra C. von Koch


Associate Director
U.S. Treasury International Affairs
Office of Technical Assistance
Government Debt Issuance & Management Program
Email: dvonkoch@ota.treas.gov

Website:
www.treasuryota.us

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