Media ININ Economy We Trust
Media In-Abu Dhabi, 13 October 2018
His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, issued Federal Decree No. 9 of 2018 on Public Debt to enable the Federal Government to issue sovereign bonds and to assist the banking sector in meeting international liquidity rules once it is issued. In addition, the law will enable banks operating in the UAE to purchase government bonds denominated in dirhams or in foreign currencies, which will help them comply with Basel III requirements. The sovereign bond issue will support the role of the United Arab Emirates central bank in managing liquidity in the banking sector. In addition, the issue of government securities will help to build a yield curve denominated in UAE Dirhams, thus strengthening the domestic financial market to finance companies operating in the country. His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, stressed the importance of the Public Debt Law and its role in developing and regulating the country’s debt market to contribute to enhancing financial stability in the country. The circulation of public debt instruments in the UAE financial markets and meeting the needs of the banking sector of liquidity. “This law will have important returns for the state. It will consolidate the development of sovereign debt management in accordance with international best practices. It will have a significant positive impact on improving the country’s macroeconomic management and better coordination between financial and monetary authorities, Strengthening the credit rating of the state. ” The Public Debt Act sets forth the general rules for the issuance and management of public debt, whereby a public debt management office will be established in the Ministry of Finance under the name of the Office of Public Debt Management and will be directly subordinate to the Minister of Finance. The Office will undertake the task of proposing public debt management strategies and policies in coordination with the United Arab Emirates Bank The implementation of strategies and policies approved by the Council of Ministers, advice on the preparation of proposals for the issuance of public debt instruments, and the role of monitoring financial risks and other risks associated with the issuance and circulation of any public debt instrument and Solutions to manage and control these risks. The Office of Public Debt Management will advise the Minister of Finance on the means of investing any public debt surplus, determine the levels of risk that can be accepted when borrowing or issuing guarantees for the purpose of implementing government projects, and will have a role in policies and procedures to reduce the costs of public debt portfolios and maintain Acceptable levels of risk. The Office of Public Debt Management will coordinate with the Central Bank of the United Arab Emirates (UAE) on managing the issuance and sale of government bonds, treasury bills and any other public debt instruments. The Public Debt Management Office will set clear short and long term objectives for public debt management in the UAE, report on the management and implementation of public debt, and coordinate with local governments in each emirate to support and develop an efficient primary and secondary financial market through public debt instruments , Where each local government has to establish a public debt office in the event that local public debt instruments are issued, the terms of reference of these offices are similar to those of the Public Debt Office issued under this law.
