Against a backdrop of persistently high foreign currency exposure in its national debt portfolio, the Surinamese government has laid out an ambitious strategy in its 2027 State Debt Plan: restarting domestic treasury bill issuance to fund current public expenditures, while laying the groundwork for a more robust local money and capital market that will reduce long-term reliance on cross-border financing.
The framework acknowledges that in the medium term, most government financing gaps will still need to be covered by foreign loans, but the gradual development of a domestic debt market is a core policy priority moving forward. Under the plan, the government will resume issuing short-dated, small-volume treasury bills – short-term debt instruments that allow commercial banks, financial institutions and domestic investors to lend directly to the state – specifically to cover routine public spending. Policymakers emphasize that building out the local capital market and investor confidence in the government as a borrower must proceed gradually and carefully to avoid market disruption.
The long-term policy goal is to expand the role of the domestic market in funding public debt. Officials project that over approximately two years of steady market development, the domestic market will gain enough capacity to absorb a larger share of future government financing shortfalls. A key secondary benefit of this shift is a gradual reduction in currency risk for the national debt portfolio – a pressing vulnerability for Suriname, where current medium-term debt strategy data shows 86.8% of total public debt is denominated in foreign currencies. Borrowing in Surinamese dollars (SRD) directly cuts the country’s exposure to exchange rate volatility that has strained public budgets in past years.
The policy shift comes at a critical fiscal juncture: the government has projected a 2027 budget deficit of roughly 10.8 billion SRD, which will be funded through a combination of existing foreign loans, new domestic and international borrowing, and the nascent development of the local capital market. While the 2027 State Debt Plan confirms the government’s intention to start with small issuance volumes and short tenors, it does not yet specify the total volume of treasury bills to be issued, exact maturity dates, or final interest rates for the upcoming issuance.
It is worth noting that the transition to domestic SRD-denominated borrowing comes with a near-term trade-off: currently, local currency borrowing carries significantly higher interest costs than foreign borrowing. The medium-term debt strategy estimates an average interest rate of 9% for SRD-denominated debt, compared to just 5.7% for foreign currency-denominated liabilities. Despite this higher near-term cost, policymakers view the development of a domestic debt market as a critical long-term investment to strengthen fiscal resilience and reduce the country’s vulnerability to external currency shocks.