Bussière, Matthieu and Christian Mulder, 1999, “External Vulnerability in Emerging Market Economies: How High Liquidity Can Offset Weak Fundamentals and the Effect of Contagion”, IMF Working Paper WP/99/88 (Washington: International Monetary Fund).
Frankel, Jeffrey A. and Andrew K. Rose, 1996, “Currency Crashes in Emerging Markets: an Empirical Treatment”, Journal of International Economics, Vol. 41, pp.351-366.
Kaminsky, Graciela, Saul Lizondo and Carmen Reinhart, 1997, “Leading Indicators of Currency Crises”, IMF Staff Papers, Vol. 45, No. 1.
Sachs, Jeffrey, Aaron Tornell and Andres Velasco, 1996, “Financial Crises in Emerging Markets: The Lessons from 1995”, Brookings Papers on Economic Activity: I, Brookings Institution, pp.147-215.
Prepared by Joël Toujas-Bernaté. This chapter has benefited from inputs provided by Gary O’Callaghan.
Moody’s, Standard & Poor’s, and IBCA gave Croatia in January 1997 their lowest investment grade rating for long-term foreign currency bonds and higher ratings for short- term bonds (both in foreign currency and kuna). Uncertainties about the political process and the possible fiscal implications of restructuring demands were cited among the main reservations.
The Euro-dollar bond has a 5-year maturity and a 7 percent coupon (80 basis point over 5-year U.S. treasury bills at the time of issuance); the Euro-DM bond has a 7-year maturity and a 6.125 percent coupon (95 basis points over the German government benchmark bond at the time of issuance); the Euro-ATS bond has a 5-year maturity and a 5.625 percent coupon; and the “Matador” bond has a 3-year maturity and a 6.5 percent coupon.
At end-1998, external government debt was estimated to be equivalent to about 15 percent of GDP, and publicly guaranteed external debt to about 5 percent of GDP.
See Chapter II for a detailed discussion of recent developments in the banking sector.
The sample includes Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, the Slovak Republic, and Slovenia.
The appreciation of the real exchange rate over the last four years for some other countries reached 40 to 80 percent. See also Chapter IV.