Technical Assistance Reports

The Bahamas: Technical Assistance Report-Domestic Local Currency Bond Market Development

Publication Date:

July 8, 2024

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

The Bahamas has a strong foundation for developing the local currency bond market (LCBM), benefitting from macroeconomic stability, and favorable fiscal and borrowing plans. The government views domestic capital market development as crucial for rebuilding economic buffers and fostering financial market development. An IMF/CARTAC a technical assistance mission visited The Bahamas in March 2023 to support the LCBM development. The mission assessed the current stage of the sovereign debt market and formulated policy recommendations for each of the six building blocks outlined in the Guidance Note for Developing Local Currency Bond Markets. Key findings highlighted significant potential to shift funding from non-concessional external borrowing to the domestic bond market, which would facilitate a more robust yield curve and deeper benchmark issuances. The mission’s key recommendations were: • Transition to a competitive auction system, allowing market prices to clear a fixed volume on offer; • Enhance communication with market participants, including through a formal investor relations strategy, and with relevant stakeholders to improve credibility, transparency, and investor appetite; and • Implement reforms sequentially, initially focusing on eliminating the most critical bottlenecks to market development.

Series:

Technical Assistance Report No. 2024/053

Subject:

Bonds Currency markets Financial institutions Financial markets Government debt management Government securities Public financial management (PFM) Securities Securities markets

Frequency:

regular