Search Results

You are looking at 1 - 5 of 5 items for :

  • "securities shallow" x
Clear All
Mame Astou Diouf and Mr. Francois Boutin-Dufresne
The West African Economic and Monetary Union (WAEMU) regional securities market saw increasing activity in the last decade, but still fell short of supplying sufficient long-term financing for growth-enhancing public and private investment projects. In addition to providing an institutional background, this paper studies recent developments and the determinants of interest rates on the market—using yield curve and principal component analyses. It also identifies challenges and prospective reforms that could help the region reap the full benefits of a more dynamic securities market and assesses the potential systemic risk the market may pose for the region’s banking system.
Mame Astou Diouf

maturity rather than to trade them frequently as part of an active and diversified investment strategy. In addition, the lack of competing investors, such as social security bodies and pension funds, keeps the nonbank buy side for securities shallow, reducing trade opportunities in the secondary market. Also, the scarcity of long-term securities with intermediate maturities, between two and seven years, limits the spectrum of investment strategies on the market. Also, capacity constraints prevent adequate pricing of securities traded in the secondary market, thus

Mame Astou Diouf and Mr. Francois Boutin-Dufresne

bills and bonds remains underdeveloped . Excess liquidity in the financial system and the interest rate spread between the refinancing operations at the central bank and sovereign securities tends to encourage banks to buy-and-hold government securities until maturity rather than to trade them frequently as part of an active and diversified investment strategy. In addition, the lack of competing investors such as social security bodies and pension funds keeps the non-bank buy-side for securities shallow, reducing trade opportunities in the secondary market. Also, the

International Monetary Fund. Asia and Pacific Dept

secondary market for government securities. Shallow FX market . The interbank FX market is currently one-sided given the overvalued exchange rate and there is a structural shortage of FX. Mineral tax receipts account for about two-thirds of FX inflows, while FX transactions are highly regulated by the BPNG. The authorities should focus on measures that would help to eliminate FX market distortions (see Selected Issues Paper on the FX market). Interest rate spreads in PNG are relatively high (In percent) Sources: Country authorities; and IMF staff estimates

International Monetary Fund. Asia and Pacific Dept
This 2015 Article IV Consultation highlights that Papua New Guinea (PNG) is facing strong headwinds from lower global commodity prices. Although the commencement of liquefied natural gas (LNG) production has boosted overall GDP growth in 2014–15, the slow growth of the nonresource sector calls for a renewed policy focus on inclusive growth in the post-LNG construction period. Risks to the outlook are increasingly skewed to the downside. Fiscal consolidation necessitated by weaker-than-anticipated revenue performance will dampen nonresource growth over the short run, and a weak global economy could further dampen external demand and commodity prices.