Dollarization and Maturity Structure of Public Securities: The Experience of Bolivia

32 Pages Posted: 1 Jul 2008

See all articles by Esteban Vesperoni

Esteban Vesperoni

International Monetary Fund (IMF); University of Maryland, College Park

Walter Orellana

Banco Central de Bolivia

Date Written: June 2008

Abstract

The public debt profile has improved in Bolivia in recent years, with regard to both the maturity structure and the currency composition. This paper analyzes changes in the public debt profile in Bolivia since 2000, and the role played by macroeconomic factors and the debt management strategy adopted by the authorities. We find that both played an important role, in particular the strengthening of the fiscal and international reserves positions and the appreciation of the Boliviano; and regulations promoting the use of the domestic currency. Our findings are consistent with Claessens, Klingebiel and Schmukler (2007) - who found that macro and institutional factors had an impact on debt profiles for a group of emerging and developed economies - and are in contrast with the original sin literature, which stresses that profiles are mainly determined by market incompleteness. We also compare the debt profile of Bolivia with those of other countries in Latin America, and find that there is still room for improvement against the regional benchmark, both in terms of maturity structure and currency composition.

Keywords: Bolivia, debt profiles, maturity structure, currency composition

JEL Classification: E44, E52, G18, H63

Suggested Citation

Vesperoni, Esteban Rodrigo and Orellana, Walter, Dollarization and Maturity Structure of Public Securities: The Experience of Bolivia (June 2008). IMF Working Paper No. 08/157, Available at SSRN: https://ssrn.com/abstract=1154332

Esteban Rodrigo Vesperoni (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

University of Maryland, College Park ( email )

College Park, MD 20742
United States

Walter Orellana

Banco Central de Bolivia ( email )

La Paz
Bolivia

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