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Bangladesh conducted its first-ever government securities buyback operation on Thursday, marking a significant milestone in the country’s public debt management. Bangladesh Bank conducted the operation on behalf of the Finance Division.
The Ministry of Finance disclosed the information in a press release on Thursday.
Government securities buyback is a modern debt management tool that allows the government to repurchase outstanding securities from the market before their maturity. It is an important instrument of internationally recognised Liability Management Operations (LMO).
According to the Finance Ministry, the initiative will help reduce the pressure of making large one-off payments when government debt matures, manage refinancing risks, smooth the debt repayment schedule and improve the efficiency of the government securities market.
The move is also expected to make public debt management more active, modern and market-oriented.
The ministry said the Finance Division has been implementing various reforms to balance the cost and risks of government borrowing, ensure sustainable debt management and develop the government securities market. The first buyback operation is an important step in the continuation of these initiatives.
The ministry said the initiative is aligned with the objectives of the government’s Medium-Term Debt Management Strategy (MTDS).
It added that similar operations could be conducted in the future, taking into account market conditions, the government’s cash position and debt management requirements.
The government will conduct Buyback Auctions as necessary, considering market conditions, liquidity, investor demand and the structure of public debt, the ministry said.