UNCTAD's Debt Management and Financial Analysis System (DMFAS

E. Analytical function1. Projections based on outstanding and present value calculationsThe analysis module has been specifically designed to calculate projections based on outstanding, and thepresent value amount using CIRRs as the rates of discount, of a debt portfolio.Because debt indicators based on the nominal value of a debt are static, they may not exactly reflect acountry’s underlying solvency. Unlike nominal value, present value takes into account the terms and theconcessionality of a debt portfolio while reflecting the costs of servicing it in “today’s money”. Debtindicators based on present value are a more appropriate measure to apprehend a country’s solvency and itsdebt servicing situation. Present value allows debt officers to more easily compare debt portfolios betweencreditors by eliminating the effects of concessionality.The module on projections based on outstanding is useful when the user needs to calculate:• The amount of interest due in the near future (for example, the amount of interest to be paid in the nextmonth), the cash flow needs of the central bank; etc.• Future debt service payments for a loan in which he foresees a cancellation of the undisbursed amount.• A debt’s present value for the purposes of analysis such as in the framework of the HIPC initiative.This module enables the user to choose between different parameters and calculation methods (the pro-rataand the truncation methods) of particular interest to produce and compare different scenarios for the debtsustainabilityanalysis of HIPC.2. Interface with the Debt Sustainability Model (DSM+)of the World BankAn interface has been created between DMFAS and DSM+, which is a tool designed to help officialsanalyze the external financing requirements of a country and to quantify the effects of debt-relief operationsor new borrowing. This interface provides the DMFAS user with the means to export data from the DMFASsystem for subsequent import into DSM+.3. Other analytical featuresDMFAS system also provides analytical support for debt managers by, for example:• Facilitating easy registration of potential new debt and analyzing the effect of these new debts on thefuture debt-service pattern;• Permitting easy simulations to determine the effect of interest rate fluctuations and exchange ratevariations over a period of time;• Calculating and giving information on detailed penalty interest from the scheduled date of a maturityregistered as an arrear to a given date; and• Calculating accrued interest. DMFAS allows debt officers to generate automatically such information,at the end of the previous month, for use by other departments, including the accounting unit.18