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Local Currency Debt Markets in the West African Economic and Monetary Union

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  • Mr. Amadou N Sy

Abstract

The paper reviews trends and developments in the rapidly growing local currency debt markets in the WAEMU. The main findings are that common institutions, such as a regional central bank and securities exchange have led to high cross-border transactions within the union. However, excess liquidity in the regional banking system has led to limited credit differentiation among issuers and a reliance on supply and demand conditions as a key determinant of yields. The paper also discusses a number of policy issues, including debt management, that are likely to emerge as the markets for government securities continue to develop.

Suggested Citation

  • Mr. Amadou N Sy, 2007. "Local Currency Debt Markets in the West African Economic and Monetary Union," IMF Working Papers 2007/256, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2007/256
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    References listed on IDEAS

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    1. Bank for International Settlements, 2007. "Financial stability and local currency bond markets," CGFS Papers, Bank for International Settlements, number 28, december.
    2. World Bank, 2007. "Managing Public Debt : From Diagnostics to Reform Implementation," World Bank Publications - Books, The World Bank Group, number 6658.
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    Cited by:

    1. Mr. Masafumi Yabara, 2012. "Capital Market Integration: Progress Ahead of the East African Community Monetary Union," IMF Working Papers 2012/018, International Monetary Fund.
    2. Mihasonirina Andrianaivo & Charles Amo Yartey, 2009. "Understanding the Growth of African Financial Markets," IMF Working Papers 2009/182, International Monetary Fund.
    3. Balma, Lacina, 2014. "Foreign Currency Debt and Exchange Rate Regimes in the Prospective Monetary Union of the ECOWAS Countries," Conference papers 332489, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Endo, Tadashi, 2020. "The primary dealer system in lower-income economies," Emerging Markets Review, Elsevier, vol. 45(C).
    5. Endo, Tadashi, 2008. "Broadening the offering choice of corporate bonds in emerging markets : cost-effective access to debt capital," Policy Research Working Paper Series 4655, The World Bank.
    6. Endo, Tadashi, 2022. "Endogenous market development for government securities in lower-income economies," Emerging Markets Review, Elsevier, vol. 50(C).
    7. Koddenbrock, Kai & Sylla, Ndongo Samba, 2019. "Towards a political economy of monetary dependency: The case of the CFA franc in West Africa," MaxPo Discussion Paper Series 19/2, Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo).
    8. Kathrin Berensmann & Florence Dafe & Ulrich Volz, 2015. "Developing local currency bond markets for long-term development financing in Sub-Saharan Africa," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 31(3-4), pages 350-378.

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