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Ministry of Finance Sets Up Public Debt Unit

The PDMU will be responsible for developing public debt and risk management strategies in line with its objective of reinforcing the financial position of the country.

It will also be one component of the Public Debt Management Office, or PDMO, which is mandated to set up debt management strategies, as well as developing alternative funding to match market opportunities and funding needs.

The PDMO will be split between the Finance Ministry and the Central Bank, with the ministry responsible for the country’s debt strategy.

The Central Bank will control the Front Office of the PDMO, issuing government securities, and the Back Office, which will settle, clear and record transactions, the ministry said on Monday in an e-mailed statement.

“The prompt formation of the PDMU, following the government’s decision to form the PDMO, indicates the UAE’s commitment to facilitate the development of a healthy debt market to provide low cost funding consistent with a prudent degree of risk. We also aim to provide effective public debt management which will strengthen the economy’s overall financial efficiency,” said Nadia Sultan of the Department of Financial Operations.

The Ministry of Finance said on June 14 that it was planning a new public debt law to allow for federal bond sales. Abu Dhabi, the largest of the seven emirates that make up the UAE, issued $3 billion of bonds to fund companies hurt by the credit crisis on April 1. Dubai’s government has sold $10 billion worth of bonds to the UAE Central Bank.

· business@khaleejtimes.com

· With inputs from Bloomberg