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About FDMO

Federal debt management is a crucial component in maintaining the stability of the UAE’s financial environment and securing the financing requirements of the federal government. The UAE’s Federal Debt Management Office (FDMO) oversees the overall debt management for the UAE Ministry of Finance with the goals of minimising cost and effectively managing risks.

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Overview

The FDMO was formally established as a directorate within the UAE Ministry of Finance through Decretal Federal Law No (9) of 2018 regarding Public Debt. It is tasked to maintain sovereign debt at sustainable level and raise sovereign funds at the lowest risk and cost. It is the focal point of the federal government for sovereign credit ratings.

          

The Federal Decree Law No (9) of 2018 on Public Debt

This Decree-Law regulates the general rules governing the issuance and management of Public Debt in accordance with a prudent and safe policy, to manage its risks and minimise its cost.

      
    
          

FDMO Responsibilities

Key roles and scope of activities

          

The duties of the FDMO are implemented through its activities and procedures which focus on achieving sustained funding within acceptable risks and costs, promoting the UAE as a strong credit rating borrower, maintaining communications and relationships with key entities, and promoting the development of the local debt market.

          

The main responsibilities of the FDMO are the following:

  • 01Propose and implement strategies and policies of Public Debt management in coordination with the Central Bank and submit them to the Minister for approval by the Cabinet
  • 02Monitor financial risks and any other risks related to the issuance and trading of any Public Debt Instrument and propose solutions to manage and monitor such risks
  • 03Provide advice to the Minister regarding investment options for any Public Debt Surplus through safe and highly liquid investment instruments, in coordination with the Central Bank and the Emirates Investment Authority
  • 04Provide advice to the Minister to determine the level of acceptable risks when borrowing or issuing any guarantees for the purpose of implementing any of the governmental development projects
  • 05Coordinate with the Central Bank regarding the management of issuance and sale of government bonds, treasury bills, and any other government securities
  • 06Coordinate with the local government in each emirate to support and develop highly efficient primary and secondary financial markets, through the issuance of Public Debt Instruments in the State
  • 07Promote the position of the UAE Federal Government as a reliable, credible and sovereign borrower, in cooperation with other relevant authorities, through frequent communication, maintaining relations with banks and investors and disclosing to them the prevailing conditions of the banking system, as well as the current general status and expectations for the economy of the UAE and scoring the best credit rating issued by international credit rating agencies
  • 08Enhance, develop, and maintain communications and relations with other relevant authorities
  • 09Develop and maintain capital markets
          

Organisational Structure

The FDMO is structured across Front, Middle and Back Office functions. This type of structure facilitates both specialisation and effective risk management within the organisation.

Organizational Structure  
          

Risk Management

The FDMO is taking a hands-on approach on managing the risks in the debt and investment portfolios. It will prepare a medium-term debt strategy (MTDS) covering the next 3 fiscal years, which will address the annual borrowing plan and debt operations. The FDMO risk management policy addresses all key risk types.

       
   
 

Refinancing and liquidity risk

Mitigate refinancing risk by managing the maturity profile of debt and asset portfolios so that there is sufficient cash on hand to meet future maturities.

          
 

Credit risk

Managing credit risk by ensuring that counterparts are rated at acceptable approved levels, and mitigate exposure through netting and collateralisation.

          
 

Market risk

Mitigate market risk for changes in interest rate, currency and commodity prices by employing asset-liability matching strategies where it is both feasible and cost effective.

          
 

Operational risk

Formulate an operational risk management framework that includes a business continuity plan and disaster recovery plan.​​​​​​​​​