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Efficiency of Foreign Debt Portfolio Management in Emerging Economies
Jönköping University, Jönköping International Business School, JIBS, Economics, Finance and Statistics.
Jönköping University, Jönköping International Business School, JIBS, Economics, Finance and Statistics.
2015 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

Fluctuation of exchange rate has affected the increasing burden of foreign debt payment in emerging economies. This issue has negatively influenced the economic growth. It has been a severe obstacle considering that governments have to issue public debt denominated in foreign currency to finance the budget deficit. Hence, there is an urgent necessity to implement an efficient public debt management to minimize the exchange rate exposure. This thesis analyses how efficient the foreign debt portfolio management is in the 14 emerging economies under examination in the period of 1990-2013. Panel Dynamic Fixed-effect Estimator and Granger Causality approach are applied to analyze how responsive the currency composition of foreign debt portfolio to the exchange rates movement. The thesis examines the four biggest foreign debt shares that are denominated in US dollar, Euro, British pound, and Japanese yen, and the related exchange rates movement in the economies under consideration. The observation concludes that the foreign debt portfolio management in these emerging economies is not efficient or not optimal. The evidences prove that changes in the exchange rates of Euro, British pound, and Japanese yen relative to US dollar Granger cause changes in respected debt shares. It means that there is no substitution effects from the appreciation of the currencies vis-à-vis the US dollar during the year of observation.

Place, publisher, year, edition, pages
2015. , 35 p.
Keyword [en]
Public debt management; Foreign debt portfolio; Exchange rate exposure; Emerging economies; Currency composition
National Category
Economics
Identifiers
URN: urn:nbn:se:hj:diva-26887ISRN: JU-IHH-NAA-1-20150014OAI: oai:DiVA.org:hj-26887DiVA: diva2:815967
Subject / course
IHH, Economics
Presentation
2015-05-20, B4043, JIBS, Gjuterigatan 5, Jönköping, 09:20 (English)
Supervisors
Examiners
Available from: 2015-06-10 Created: 2015-06-02 Last updated: 2015-06-10Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf