IMF and World Bank approve LIC-DSF reforms to add domestic-debt risk module

On 9 September 2026 the IMF Executive Board approved reforms to the joint IMF–World Bank Debt Sustainability Framework for Low-Income Countries, adding a domestic-debt risk module, new overall public-debt thresholds and a mechanical risk signal; the revised framework is expected to be operational for Board submissions after the 2027 summer recess.

The new domestic-debt module will explicitly raise the measured rollover and crowding risks for countries that rely heavily on local-currency financing, which can change debt-stress classifications and influence investor preference between domestically financed versus externally financed credits. This is a methodological change: it conditions assessments and country documents rather than directly repricing bonds, but it can alter perceived sovereign risk premia once applied.

Framework to become operational for IMF Board country documents after the 2027 summer recess.