TY - BOOK ID - 84540574 TI - Exchange Rate Policy and Sovereign Bond Spreads in Developing Countries AU - Yue, Zhanwei. AU - Jahjah, Samir. PY - 2004 SN - 1462342604 1452737924 1283513439 9786613825889 1451919417 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Foreign exchange rates KW - State bonds KW - Bonds KW - Government securities KW - Exchange rates KW - Fixed exchange rates KW - Flexible exchange rates KW - Floating exchange rates KW - Fluctuating exchange rates KW - Foreign exchange KW - Rates of exchange KW - Econometric models. KW - Rates KW - Banks and Banking KW - Financial Risk Management KW - Foreign Exchange KW - Central Banks and Their Policies KW - International Monetary Arrangements and Institutions KW - International Lending and Debt Problems KW - Development Planning and Policy: Trade Policy KW - Factor Movement KW - Foreign Exchange Policy KW - Interest Rates: Determination, Term Structure, and Effects KW - Financial Crises KW - Currency KW - Finance KW - Economic & financial crises & disasters KW - Exchange rate arrangements KW - Exchange rate policy KW - Yield curve KW - Financial crises KW - Financial services KW - Interest rates KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:84540574 AB - We test the hypothesis of a link between exchange rate policy and sovereign bonds. We analyze the effect of exchange rate policies on supply and credit spreads of sovereign bonds issued by developing countries. An exchange rate policy is captured by the de facto exchange rate regime and the real exchange rate misalignment. The main findings are: (1) real exchange rate overvaluation significantly increases sovereign bond issue probability and raises bond spreads; (2) spreads and the likelihood of issuing bonds depend on the exchange rate regime; (3) exchange rate misalignment under a hard peg significantly increases bond spreads; (4) in time of debt crises, exchange rate policy also greatly affects the sovereign bond market, especially through exchange rate overvaluation. ER -