The Role of Foreign Currency Debt in Public Debt Management

February 1, 1995

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper analyzes the choice between public debt denominated in domestic currency and foreign currency in the context of public debt management theories. It discusses the experience of Belgium, Denmark, Ireland, Italy, New Zealand and Sweden and relates it to the theoretical arguments in favor or against the Issuance of foreign currency debt.

Subject: Currencies, Expenditure, External debt, Foreign currency debt, Foreign exchange, Government debt management, Money, Public debt, Public financial management (PFM)

Keywords: Currencies, currency bond, currency composition, debt ratio, debt share, default premium, foreign currency component, foreign currency debt, Foreign currency debt, foreign exchange loss, Global, Government debt management, neutrality theorem, public spending, share of foreign currency debt, using swap operation, WP, yield differential

Pages:
38
Volume:
1995
DOI:
https://doi.org/10.5089/9781451843880.001
Issue:
021
Series:
Working Paper No. 1995/021
Stock No:
WPIEA0211995
ISBN:
9781451843880
ISSN:
1018-5941

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