Global sovereign debt roundtable

February 16, 2023

On the sidelines of the G20 meeting, Global Sovereign Debt Roundtable is to be held in Bengaluru. The event will discuss issues that are obstructing the debt restructuring processes. It will be co-chaired by IMF and World Bank along with India (the 2023 President). The main objective of the discussion will be on identifying the impediments in debt restructuring processes.

G20 Finance Track

It will focus on inclusive finance and digital finance. During the meeting, G20 countries will discuss financial issues faced by them during COVID. Also, the countries will share lessons learnt through their fiscal policies and taxation.

Role of IMF and World Bank

Today we need more than 16.9 billion USD of loan resources and 3.1 billion USD of subsidy resources. The loans are essential to support zero-interest lending to developing countries. The IMF and World Bank will aid in providing funds and support poverty, growth trust, and reduction. Also, the financial organizations will provide concessional finances to countries that are economically vulnerable.

What is Sovereign debt?

It is the debt the government of a country owes to a financial organization. This includes both domestic and foreign financial organizations.

Significance

Sovereign debt rating speaks about the amount of debt a country has. The higher the debt, the greater the ratings. Investors plan their investments based on the sovereign debt ratings of a country. Therefore, it is essential to keep these debts minimal. To reduce sovereign debts, the debt restructuring processes were launched by World Bank and IMF. However, countries are facing difficulties in implementing the plans. So they are to look for the reasons why the countries are unable to implement the restructuring plans at the Global Sovereign Debt Roundtable to be held in Bengaluru.

« Previous Post Next Post »