IMF flags up sovereign debt instrument to help with post-Covid restructures

By Phil Thornton
20 Nov 2020

An obscure sovereign debt instrument could play a role in ensuring that countries facing a debt crisis in the aftermath of Covid-19 can organise a swifter restructuring with creditors, according to the International Monetary Fund.

The multilateral said a standardised version of state-contingent debt instruments (SCDI) could be used to renegotiate a sovereign’s entire debt stock with the consent of existing creditors.

SCDIs allow for increased payouts based on improved economic outcomes and can play an important role in future sovereign debt restructurings, ...

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