Local Currency Debt Markets in the West African Economic and Monetary Union
IMF Working Papers, November 1, 2007
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- Local Currency Debt Markets in the West African Economic and Monetary Union
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Bibliographic details
- Authors: Amadou N Sy
- Published: November 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451868197.001
Summary and main findings
- The paper reviews trends and developments in the rapidly growing local currency debt markets in the WAEMU.
- Common institutions, such as a regional central bank and securities exchange, have led to high cross-border transactions within the union.
- 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 discusses a number of policy issues, including debt management, that are likely to emerge as the markets for government securities continue to develop.
- 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.
Policy issues and implications highlighted
- Debt management: as government securities markets develop, debt management practices will become a central policy concern.
- Market structure and liquidity: excess banking system liquidity influences yield formation and credit differentiation, implying potential roles for policy to improve market signaling and issuer differentiation.
- Regional institutional framework: the presence of a regional central bank and securities exchange has facilitated cross-border transactions, underscoring the importance of common institutions for market integration.
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