Title Exchange rate policy and sovereign bond spreads in developing countries / prepared by Samir Jahjah and Vivian Zhanwei Yue

Published [Washington, D.C] : International Monetary Fund, ©2004

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Description 1 online resource (35 pages) : illustrations Series IMF working paper ; WP/04/210 IMF working paper ; WP/04/210. Contents Contents -- I. INTRODUCTION -- II. THE DATA -- III. EMPIRICAL ANALYSIS -- IV. CONCLUSION -- REFERENCES Summary We test the hypothesis of a link between exchange rate policy and sovereign bonds. We analyze the effect of exchange rate policies on supply and credit spreads of sovereign bonds issued by developing countries. An exchange rate policy is captured by the de facto exchange rate regime and the real exchange rate misalignment. The main findings are: (1) real exchange rate overvaluation significantly increases sovereign bond issue probability and raises bond spreads; (2) spreads and the likelihood of issuing bonds depend on the exchange rate regime; (3) exchange rate misalignment under a hard peg significantly increases bond spreads; (4) in time of debt crises, exchange rate policy also greatly affects the sovereign bond market, especially through exchange rate overvaluation Bibliography Includes bibliographical references (pages 33-35) Notes Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL Print version record Subject Foreign exchange rates -- Developing countries -- Econometric models State bonds -- Developing countries -- Econometric models Foreign exchange -- Developing countries Bonds -- Developing countries Debts, External -- Developing countries Monetary policy -- Developing countries Monetary policy Foreign exchange Debts, External Bonds Foreign exchange rates -- Econometric models Developing countries Form Electronic book Author Yue, Vivian Zhanwei, author International Monetary Fund. IMF Institute. ISBN 9781451919417 1451919417

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