The contagion effect of public debt on monetary policy
Brazilian Journal of Political Economy, Vol. 26 No. 2 (2006), Apr-Jun / 2006, Pages 231-238
the Brazilian experience
This paper attempts to explain why the Brazilian inter-bank interest rate is so high compared with rates practiced by other emerging economies. The interplay between the markets for bank reserves and government securities feeds into the inter-bank rate the risk premium of the Brazilian public debt.
JEL Classification: E4; E5.
Keywords: inter-bank interest rate public debt risk premium monetary policy operational procedures