Considerations in the choice of the appropriate discount rate for evaluating sovereign debt restructurings
By: prepared by Julie Kozack.
Contributors: International Monetary Fund. Policy Development and Review Dept.
Series: IMF policy discussion paper -- PDP/05/9
Published: 2005
Place of publication: [Washington, D.C.]
Language: eng
Number of pages: 27
Subjects: Debts, Public.; Discount.; Debt relief.; Financial crises.
Description: Assessments regarding the effectiveness of sovereign debt restructurings are often  summarized by comparisons of the net present value of debt service before and after the restructuring. These calculations are inherently sensitive to the choice of discount rate. This  paper explores issues that arise in selecting discount rates when evaluating sovereign debt restructurings. It suggests using a range of discount rates and centering the analysis around the internal rate of return to assess whether the debt restructuring has generated net present  value savings or costs to the debtor.
Notes: "December 2005."

Includes bibliographical references (p. 26-27).

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