Building a sustainable and efficient government funding programme is one of the keys to stability and growth for any country.
But to achieve an appropriate balance between domestic and international borrowing, a country’s debt managers must have a full range of options open to them. Getting there is not always easy.
A recent report from the World Bank titled “Why are more sovereigns issuing in Euros? Choosing between USD and EUR-denominated bonds” offers some interesting insights into the different motivations that help shape a country’s international debt issuance.
What particularly interests me is that it puts the spotlight on three Latin American countries – Peru, Chile and Mexico – where Euroclear has had a role in helping develop international investor interest.
The study asks the question why more sovereigns are issuing in euros, but it could just as easily have asked what these countries are doing to diversify their investor base and maximise the range of funding options open to them. Increased issuance in euros is only part of the story.