Financing for the Post-Pandemic Recovery: Developing Domestic Sovereign Debt Markets in Central America
34 Pages Posted: 4 Feb 2022
Date Written: December 1, 2021
The pandemic has urged countries around the globe to mobilize financing to support the recovery. This is even more relevant in Central America, where the policy response to cushion the pandemic’s economic and social impact has accentuated pre-existing debt vulnerabilities. This paper documents the potential for local currency bond markets to diversify and expand financing for the recovery, lowering bond yields, funding volatility, and exposure to global shocks. The paper further identifies priority actions, both national and regional, to support market development.
Keywords: Bond Markets, Fiscal Deficit, Public Debt, Global Spillovers.
JEL Classification: E44, E62, H63
Suggested Citation: Suggested Citation