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Mon 7 Sep 2009 04:22 PM

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UAE sets up unit to manage public debt

Ministry of Finance announces move to prepare way towards 'development of healthy debt market'.

The UAE Ministry of Finance has set up a unit responsible for managing public debt, it announced in a statement on Monday.

The unit's establishment reflects the UAE's "commitment to preparing the way towards the development of a healthy debt market to provide financing at the lowest cost and at acceptable risk levels," Nadia Sultan from the Department of Financial Operations said.

The unit, one of three forming the public debt management office (PDMO) which answers to the finance minister, will have responsibilities including strategy and coming up with alternative financing scenarios, as well as implementing the debt department's plans.

As part of its mandate, the PDMO will "set up a clear and realistic debt management strategy with an underlying aim to develop alternative funding or asset management scenarios to match market opportunities and funding needs, simultaneously evaluating cost of funds, asset yield and risk ratios", the statement added.

The Ministry added that the PDMO's recommendations on transactions will be "transparent and accountable".

"It will prepare its borrowing plans, issuance calendars of government securities and annual reports on the Debt Management Office's activities, to ensure investors can reasonably anticipate the objectives, goals, size, and dates of maturity of debt," it said.

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