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International government debt denominated in local currency: recent developments in Latin America

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  • Camilo E Tovar

Abstract

Governments in Latin America have traditionally faced significant difficulties in issuing debt denominated in local currency in international markets. However, three countries in the region have recently issued this type of debt, perhaps signalling a permanent change in the manner in which Latin American borrowers tap international bond markets. Nonetheless, the degree to which issuing international debt in local currency complements the development of domestic debt markets remains to be seen.

Suggested Citation

  • Camilo E Tovar, 2005. "International government debt denominated in local currency: recent developments in Latin America," BIS Quarterly Review, Bank for International Settlements, December.
    • Handle: RePEc:bis:bisqtr:0512i
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    References listed on IDEAS

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    1. Robert McCauley & Guorong Jiang, 2004. "Diversifying with Asian local currency bonds," BIS Quarterly Review, Bank for International Settlements, September.
    2. Burger, John D. & Warnock, Francis E., 2007. "Foreign participation in local currency bond markets," Review of Financial Economics, Elsevier, vol. 16(3), pages 291-304.
    3. Philip D Wooldridge & Dietrich Domanski & Anna Cobau, 2003. "Changing links between mature and emerging financial markets," BIS Quarterly Review, Bank for International Settlements, September.
    4. Guorong Jiang & Robert McCauley, 2004. "Asian local currency bond markets," BIS Quarterly Review, Bank for International Settlements, June.
    5. Morris Goldstein & Philip Turner, 2004. "Controlling Currency Mismatches in Emerging Markets," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 373, April.
    6. Benjamin H Cohen, 2005. "Currency choice in international bond issuance," BIS Quarterly Review, Bank for International Settlements, June.
    7. Michael D. Bordo & Christopher Meissner & Angela Redish, 2003. "How "Original Sin" was Overcome: The Evolution of External Debt Denominated in Domestic Currencies in the United States and the British Dominions," NBER Working Papers 9841, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Romelli, Davide & Terra, Cristina & Vasconcelos, Enrico, 2018. "Current account and real exchange rate changes: The impact of trade openness," European Economic Review, Elsevier, vol. 105(C), pages 135-158.
    2. Joan Ripoll-i-Alcón, 2010. "Trade Integration as a Mechanism of Financial Crisis Prevention," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 16(2), pages 149-164, May.
    3. repec:idb:brikps:349 is not listed on IDEAS
    4. Serge Jeanneau & Camilo E Tovar, 2008. "Latin America’s local currency bond markets: an overview," BIS Papers chapters, in: Bank for International Settlements (ed.), New financing trends in Latin America: a bumpy road towards stability, volume 36, pages 46-64, Bank for International Settlements.
    5. Serge Jeanneau & Camilo E Tovar, 2006. "Domestic bond markets in Latin America: achievements and challenges," BIS Quarterly Review, Bank for International Settlements, June.
    6. Diego Alejandro Martínez Cruz & José Fernando Moreno Gutiérrez & Juan Sebastián Rojas Moreno, 2015. "Evolución de la relación entre bonos locales y externos del gobierno colombiano frente a choques de riesgo," Borradores de Economia 919, Banco de la Republica de Colombia.
    7. Paloma Acevedo & Enrique Alberola & Carmen Broto, 2007. "Local debt expansion... vulnerability reduction? An assessment for six crises-prone countries," Working Papers 0733, Banco de España.
    8. Maurice Obstfeld, 2009. "International Finance and Growth in Developing Countries: What Have We Learned?," NBER Working Papers 14691, National Bureau of Economic Research, Inc.
    9. Yilmaz Akyüz, 2014. "Internationalization of Finance and Changing Vulnerabilities in Emerging and Developing Economies," UNCTAD Discussion Papers 217, United Nations Conference on Trade and Development.
    10. Paloma Acevedo & Enrique Alberola & Carmen Broto, 2008. "Local debt expansion and vulnerability reduction: an assessment for six crisis-prone countries," BIS Papers chapters, in: Bank for International Settlements (ed.), New financing trends in Latin America: a bumpy road towards stability, volume 36, pages 88-109, Bank for International Settlements.
    11. Bank for International Settlements, 2007. "Financial stability and local currency bond markets," CGFS Papers, Bank for International Settlements, number 28, december.
    12. Huang, Tao & Wu, Fei & Yu, Jing & Zhang, Bohui, 2015. "International political risk and government bond pricing," Journal of Banking & Finance, Elsevier, vol. 55(C), pages 393-405.
    13. Henri Audigé, 2014. "Net flows to emerging markets’ funds and the U.S. monetary policy after the subprime crisis," Working Papers hal-04141341, HAL.
    14. Lindner, Axel, 2006. "Original Sin - Analysing Its Mechanics and a proposed Remedy in a Simple Macroeconomic Model," IWH Discussion Papers 11/2006, Halle Institute for Economic Research (IWH).
    15. M S Mohanty & Gert Schnabel & Pablo Garcia-Luna, 2006. "Banks and aggregate credit: what is new?," BIS Papers chapters, in: Bank for International Settlements (ed.), The banking system in emerging economies: how much progress has been made?, volume 28, pages 11-39, Bank for International Settlements.
    16. repec:kap:iaecre:v:16:y:2010:i:2:p:149-164 is not listed on IDEAS
    17. Renu Kohli & Pravakar Sahoo & M. Shuheb Khan, 2017. "Developing India's Offshore Local Currency Bond Market: Lessons from Emerging Countries," Working Papers id:12039, eSocialSciences.
    18. Henri Audigé, 2014. "Net flows to emerging markets’ funds and the U.S. monetary policy after the subprime crisis," EconomiX Working Papers 2014-23, University of Paris Nanterre, EconomiX.
    19. André Amante & Márcio Araujo & Serge Jeanneau, 2007. "The search for liquidity in the Brazilian domestic government bond market," BIS Quarterly Review, Bank for International Settlements, June.

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    More about this item

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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