Senegal has defended its use of derivatives-linked financing, arguing that the structure helps manage borrowing costs more effectively despite growing scrutiny from investors and international lenders, according to Reuters.
Government officials say the instruments, often tied to currency or interest rate movements, are designed to reduce upfront financing costs and hedge against market volatility, particularly at a time when global borrowing conditions remain tight.
The defence comes as Senegal faces rising debt servicing obligations, with payments projected to increase significantly over the coming years, reflecting broader fiscal pressures and the need for innovative financing solutions to manage liquidity .
Authorities maintain that derivatives-linked deals are part of a broader strategy to optimise debt management and maintain market access, even as negotiations continue with international partners over fiscal reforms and long-term financing stability.
