The Choice Between External and Domestic Debt in Financing Budget Deficits [Elektronisk resurs] The Case of Central and West African Countries / Philippe Beaugrand.

• The paper reviews the principles and practical considerations involved in the choice between foreign and domestic financing of fiscal deficits, and derives a series of recommendations broadly applicable to Central and West African countries. The paper develops a simple analytical framework and shows that highly concessional external debt is usually a superior choice to domestic debt in terms of financial costs and risks, even in the face of a probable devaluation. The paper stresses the importance of the availability and terms of financing, and of overall long-term debt sustainability. It concludes that these countries need to take a gradual approach to domestic debt financing, beginning with the issuance of short-term bills, and ensure a solid track record of meeting their debt-service obligations. 

Ämnesord

Budget Deficit Financing  (imf)

Central Bank  (imf)

Debt Management  (imf)

Deficit  (imf)

Macroeconomic - Aspects of Public Finance  (imf)

Macroeconomic Policy  (imf)

Cameroon  (imf)

Central African Republic  (imf)

Equatorial Guinea  (imf)

Guinea  (imf)

Mauritania  (imf)