The Covid-19 pandemic is putting government finances of many developing countries under severe strain (Djankov and Panizza 2020). In response, a range of proposals and calls for action have been floated by experts and policy makers (Bolton et al. 2020a, 2020b, Bulow et al. 2020; Horn et al. 2020; Landers et al. 2020). In a short time, the international community under the leadership of the G20 agreed to help poor countries by offering a suspension of debt servicing due in the second half of 2020. Under the Debt Service Suspension Initiative (DSSI) participating countries can ask their bilateral lenders to defer debt service repayments by three years without affecting the net present value (NPV) of public debt. The size of the liquidit…
Read the full article at: https://voxeu.org/article/borrowing-costs-after-debt-relief