Stipulated by Royal Decree 39/96 the Ministry of Finance is the only institution entitled to borrow on behalf of the Government. Governorates are not permitted to borrow. In 2017, the Government established a debt management office to manage its public debt portfolio. The Debt Management Office’s (“DMO”) main objectives are as follows:
• Setting and developing the Government’s public debt policy and securing its financing needs in the short, medium and long term.
• Ensuring the Government’s sustainable access to various debt markets at fair prices with prudent risk.
• Coordinate and manage the Government Related Entities (GRE) in meeting their financing needs.
• Coordinate with the relevant government authorities the relations with the Credit Rating Agencies and the investor community.
The DMO may raise loans for the central government for the following purposes:
• Finance the current deficits in the central government budget.
• Extend credit and guarantees to GREs.
• Amortise, redeem and buy back government loans.
• Meet the CBO’s need for foreign currency reserves.
The DMO’s debt strategy for the medium term focuses on supporting the Government in implementing the State Budget and the medium-term fiscal plan by: (i) efficiently managing the Government’s debt portfolio by ensuring it is well-diversified, sustainable and supportive of Government and private sector needs; (ii) ensuring the Government’s financial requirement and payment obligations are met at the lowest possible cost with a prudent degree of risk over the medium to long term; and (iii) supporting the growth and development of the domestic debt capital market.
