Public Debt Markets in Central America, Panama, and the Dominican Republic

By Andreas Jobst, Laura Valderrama, Ivan S Guerra, Hemant Shah

June 1, 2007

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Andreas Jobst, Laura Valderrama, Ivan S Guerra, and Hemant Shah. Public Debt Markets in Central America, Panama, and the Dominican Republic, (USA: International Monetary Fund, 2007) accessed November 21, 2024

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-consisting of a regional study and seven country studies-reviews the state of domestic public debt markets in Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and Panama as at end-2005. Although they account for the lion's share of capital markets, regional public debt markets remain underdeveloped for a variety of reasons. The problems of small scale, dollarization, and weak public finances in many countries are compounded by poor structure and composition of debt (with sizeable nonstandard and non-tradable components), fragmentation of public debt between central banks and the sovereigns and across instruments, poor debt management practices, weaknesses in securities market, and small investor bases all of which result in high transaction costs and a lack of liquid benchmarks. The paper also briefly discusses efforts towards and impediments to regional integration of public debt markets. The authorities recognize these problems and the paper takes note of the regional efforts to harmonize debt standards and improve issuance practices. It offers several recommendations to improve strategic debt management, issuance mechanics, and secondary trading.

Subject: Banking, Bonds, Financial institutions, Financial markets, Government debt management, Public debt, Public financial management (PFM), Securities, Securities markets

Keywords: And capital market development, Bonds, Capital market, Central America, Discounted bond, Financial integration, Global, Global bond, Government debt management, Institutional investor, Interest rate, Investment funds, Long-term debt, Public debt management, Public debt markets, Rate of return, Secondary market, Securities, Securities markets, Short term, Short-term debt, Sovereign debt, WP

Publication Details

Pages:

150
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/147
Stock No:

WPIEA2007147
ISBN:

9781451867114
ISSN:

1018-5941

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