Interest Rates in Mexico - The Role of Exchange Rate Expectations and International Creditworthiness
AbstractThe link is explored between interest rates on domestic financial assets in Mexico and expectations of exchange rate changes and perceptions about default risks contained in Mexico's external debt. Interest rate differentials between peso- and U.S. dollar-denominated assets are shown to have reflected concerns about the exchange rate policy during the period considered. The evidence also suggests that the interest rate on a U.S. dollardenominated Mexican domestic asset is linked to the yield implicit in the secondary market price for external debt issued by Mexico.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 91/12.
Date of creation: 01 Jan 1991
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Postal: International Monetary Fund, Washington, DC USA
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Other versions of this item:
- Hoe E. Khor & Liliana Rojas-Suarez, 1991. "Interest Rates in Mexico: The Role of Exchange Rate Expectations and International Creditworthiness," IMF Staff Papers, Palgrave Macmillan, vol. 38(4), pages 850-871, December.
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
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- NEP-ALL-2013-02-16 (All new papers)
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- Kaminsky, G.L. & Leiderman, L., 1996.
"High Real Interest Rates in the Aftermath of Disinflation: Is It a Lack of Credibility,"
8-96, Tel Aviv.
- Kaminsky, Graciela L. & Leiderman, Leonardo, 1998. "High real interest rates in the aftermath of disinflation: is it a lack of credibility?," Journal of Development Economics, Elsevier, vol. 55(1), pages 191-214, February.
- Graciela L. Kaminsky & Leonardo Leiderman, 1996. "High real interest rates in the aftermath of disinflation: is it a lack of credibility?," International Finance Discussion Papers 543, Board of Governors of the Federal Reserve System (U.S.).
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