The Regional Debt Coordinating Committee (RDDC) convened on 3 December 2021 to strategise on a harmonised approach to public sector debt management and to consider the impact of the end of the London Interbank Offer Rate (LIBOR) on the Eastern Caribbean Currency Union’s (ECCU’s) debt portfolio.
As ECCU member countries continue to grapple with the effects of the coronavirus pandemic, Government’s revenues have declined amidst depressed economic growth; while expenditures have increased, as governments channel additional resources to the health sector and to persons affected by the Pandemic. The Regional Government Securities Market (RGSM) has provided useful resources to governments prior to, and during, the Pandemic.
Since its inception, the RGSM has grown consistently. The immediate three years prior to the Pandemic were the best years to-date in terms of market activity, with an average growth of 5.0 per cent in the value of funds that participating governments have raised.
Although Governments continued to utilize the RGSM during the Pandemic, activity was affected, particularly with respect to Treasury Bill issuance. Notwithstanding, the market has been stable, with all participating governments maintaining their commitments on the market.
In order to ensure accurate monitoring of the 60.0 per cent Debt to GDP target for the ECCU, the RDCC agreed to continue to support ECCU member countries in reporting the total public sector debt which covers central government and public corporations’ guaranteed and non-guaranteed debt, short-term debt instruments and outstanding liabilities.
Moreover, cognisant of the likely impact on the ECCU’s debt portfolio of the phasing out of the LIBOR rate, which was introduced in the late 1960’s, the RDCC agreed to encourage member countries to consider the early transition option that multilateral creditors are considering from 2022; and to undertake early negotiations with creditors.
The RDCC, which comprises of the Financial Secretaries of the eight member states of the ECCU and the Governor of the ECCB, has direct oversight for the RGSM. Denise Edwards, Financial Secretary in the Ministry of Finance of the Commonwealth of Dominica, chaired the 44th meeting of the RDCC, which was held virtually on 3 December 2021.