Loan issuances
The Government of Aruba maintains a loan portfolio with varying maturities. The maturity schedule shows that each year a certain amount must be repaid. Although Aruba is able to meet part of these obligations independently, the other portion requires refinancing. This refinancing need, referred to as the financing requirement of the Government of Aruba, is authorized each year by the Parliament of Aruba in Article 2 of the government’s budget. This authorization primarily concerns the refinancing of existing external and domestic loans. Through this systematic approach, the government manages and optimizes its debt position, with attention to continuity, liquidity, and cost-efficiency.
The total financing requirement is determined by the budget balance:
- A positive balance reduces the financing requirement.
- A deficit increases the financing requirement.
The decision regarding the timing of financing and the choice between the domestic or international capital market is initiated based on the advice of the Treasurer of the Government of Aruba.
In making this decision, several factors are considered, including:
- repayment obligations to investors;
- the current and future liquidity needs of the government;
- market conditions at the local, regional, and international levels;
- the level of liquidity in various markets;
- the implications for the current account, capital account, and financial account of the government.
This integrated approach enables the Government of Aruba to operate strategically and responsibly within a dynamic financial landscape.