IMF Forum Explores How Governments Can Better Navigate Rising Borrowing Costs, Refinancing Pressures

KUALA LUMPUR, May 28 (Bernama) -- The 20th International Monetary Fund (IMF) Public Debt Management Forum explores and discusses how governments can better navigate the challenges of rising borrowing costs and debt refinancing pressures.

The forum was jointly organised by the Finance Ministry, Bank Negara Malaysia (BNM) and the IMF on May 27-28.

The Finance Ministry said in a statement that one key focus was improving the liquidity of government bond markets to ensure investors remain confident and engaged even during times of economic uncertainty.

“Participants also explored Islamic finance’s growing role in sovereign borrowing strategies, offering new opportunities for countries seeking to diversify funding sources,” it said.

Finance Minister II Datuk Seri Amir Hamzah Azizan highlighted in his keynote address the importance of global collaboration in shaping resilient debt strategies in the face of rising debt vulnerabilities and shifting investor expectations.

“It is increasingly clear that the future of debt sustainability cannot rely on national efforts alone. We must strengthen cross-border collaboration, deepen institutional partnerships, and foster the exchange of knowledge to build resilience and strengthen investor confidence,” he said.

The two-day forum, themed ‘Managing Public Debt Amid Evolving Capital Markets’ has gathered around 200 senior government officials, public debt managers and financial market experts from a total of 37 emerging and advanced countries to engage in critical discussions shaping the future of sovereign debt management.

This forum discussed emerging challenges and opportunities in sovereign financing risks, weathering the market volatility, Islamic finance, digitalisation in government bond markets and the role of primary dealers as well as market makers.

Besides, IMF’s financial counsellor and director of the monetary and capital markets department, Tobias Adrian discussed the risks to global financial stability and emphasised the importance of debt transparency.

Meanwhile in closing remarks, BNM governor Datuk Seri Abdul Rasheed Ghaffour said that in ASEAN, Malaysia alongside our regional peers are working closely to support prudent sovereign debt management by fostering regional cooperation, sustainable infrastructure financing, and resilient financial markets.

“For example, efforts are being made to facilitate regional economic and debt market integration under the ASEAN Economic Community (AEC) framework,” he said.

The forum also shared experiences with digitalisation in public finance, specifically the role of technologies like tokenised bonds to modernise the way governments issue and manage debt.

Experts also emphasised the importance of green and sustainable financing to help countries fund long-term development.

The forum also covered topics on well-structured primary dealer frameworks to ensure market depth and investor confidence.

The final session revisited the 2014 IMF and World Bank’s Guidelines on Public Debt Management, evaluating its relevance in the face of new challenges and potential areas for further evolution.

-- BERNAMA