Reducing Bangladesh’s Operational Risks: IMF-World Bank Joint Mission Urges Unified Debt Management Office

A joint mission of the International Monetary Fund (IMF) and the World Bank has recommended setting up a unified Debt Management Office (DMO) to strengthen Bangladesh’s public debt framework and mitigate fiscal and operational risks.

The mission observed that Bangladesh’s debt management functions are currently fragmented across several agencies, leading to coordination challenges, inconsistent data, and the absence of a unified debt strategy.

The recommendation was shared at a workshop titled “Establishing a Debt Management Office,” held on Monday at the Secretariat in Dhaka, according to a Finance Division press release. The event was organised under the Strengthening the Capacity of the Treasury and Debt Management Wing scheme, part of the Strengthening Public Financial Management to Enable Service Delivery (SPFMS) programme.

The mission proposed consolidating all government and government-guaranteed debt functions under the Finance Division, beginning with a restructuring of the Treasury and Debt Management Wing. In its initial phase, the proposed DMO would manage domestic debt issuance, prepare annual borrowing plans, coordinate auction schedules, assess portfolio risks, and maintain a unified debt database.

The report also underscored the need for a clear legal framework defining borrowing authority, accountability, and transparency standards.

Specialised staffing was highlighted as a key requirement. The mission recommended recruiting professionals skilled in capital markets, pricing, settlement operations, and risk management—drawing talent from Bangladesh Bank, commercial banks, and the capital market. To attract and retain such expertise, the government was advised to offer competitive pay and career growth opportunities.

In the medium term, the DMO could evolve into an autonomous institution with a broader mandate, including oversight of contingent liabilities and investor relations.

Drawing on global experiences since the 1980s, the mission noted that centralised DMOs have enabled countries to lower borrowing costs, enhance fiscal transparency, and better separate debt management from monetary policy.

Establishing a DMO in Bangladesh, the mission concluded, would require strong political commitment, phased institutional restructuring, modern IT systems, and sustained inter-agency coordination. Once operational, it is expected to boost market confidence, reduce financing costs, and strengthen long-term fiscal stability.

Senior officials from the Finance Division and experts from the IMF and World Bank attended the workshop.