Choosing the Currency Structure for Sovereign Debt : A Review of Current Approaches

This paper acknowledges the fact that some countries have to borrow in foreign currencies due to the various constraints they face. Starting from this point, the author reviews approaches for trying to determine the currency structure for sovereign debt, and discusses some issues inherent in these approaches. The analysis mainly focuses on the correlations of domestic fundamentals with the actual versus equilibrium exchange rate in light of the long-term perspective of a debt manager and changing exchange rate regimes. In addition, the author makes some observations on the characterization of exchange rate volatilities in the existing approaches.

Bibliographic Details

Main Author:	Melecky, Martin
Language:	English
Published:	World Bank, Washington, DC 2007-06
Subjects:	ACCOUNTING, ARBITRAGE, ASSET AND LIABILITY MANAGEMENT, BALANCE SHEET, BALANCE SHEETS, BENCHMARK, BENCHMARKS, BOND MARKET, BOND MARKETS, BONDS, BOOK VALUE, BORROWING, CAPITAL MARKETS, CENTRAL BANK, CENTRAL BANKS, COMPARATIVE ADVANTAGES, CONTAGION, CREDITOR, CRISES EPISODES, CURRENCY COMPOSITION, CURRENCY CRISES, CURRENCY CRISIS, CURRENCY DEBT, CURRENCY DEBTS, CURRENCY MISMATCHES, CURRENCY RISK, DEBT, DEBT CRISES, DEBT CRISIS, DEBT INSTRUMENTS, DEBT MANAGEMENT, DEBT MANAGEMENT AUTHORITY, DEBT MANAGEMENT CAPACITIES, DEBT MANAGEMENT DEPARTMENT, DEBT MANAGER, DEBT MANAGERS, DEBT PORTFOLIO, DEBT PORTFOLIOS, DEBT RATIO, DEBT SERVICING, DEBT STRUCTURE, DEBTS, DOMESTIC CURRENCIES, DOMESTIC CURRENCY, DOMESTIC ECONOMY, ECONOMETRIC MODELS, ECONOMIC DEVELOPMENT, ECONOMIC INTEGRATION, ECONOMIC STRUCTURE, EMERGING MARKET, ENDOGENOUS VARIABLES, EQUILIBRIUM, EXCHANGE RATE, EXCHANGE RATES, EXPENDITURES, EXPORTS, EXTERNAL DEBT, EXTERNAL SHOCKS, FORECASTS, FOREIGN CURRENCIES, FOREIGN CURRENCY, FOREIGN CURRENCY DEBT, FOREIGN DEBT, FOREIGN EXCHANGE, FOREIGN INVESTORS, FOREIGN RESERVES, FOREIGN TRADE, FOREIGN-CURRENCY DEBT, FOREIGN-CURRENCY DEBTS, GDP, GOVERNMENT DEBT, GROWTH RATE, INSTITUTIONAL INVESTORS, INTEREST RATE, INTEREST RATE RISK, INTEREST RATES, LOCAL-CURRENCY DEBT, MACROECONOMIC POLICIES, MONETARY POLICY, NOMINAL INTEREST RATE, OPTIMIZATION, OUTSTANDING DEBT, PORTFOLIO, PRIVATE SECTOR, REAL GDP, REAL INTEREST RATE, RISK PREMIA, RISK PREMIUM, SOVEREIGN BORROWERS, SOVEREIGN CREDIT RISK, SOVEREIGN DEBT, VAR MODELS,
Online Access:	http://documents.worldbank.org/curated/en/2007/06/7694702/choosing-currency-structure-sovereign-debt-review-current-approaches https://hdl.handle.net/10986/7394
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