This paper investigates whether macroeconomic and data transparency standards lead to lower borrowing costs
in sovereign bond markets. We essentially show that emerging market countries which subscribed to the Special
Data Dissemination Standard (SDDS) experienced a significant decline in borrowing cost proxied by sovereign
yield spreads on secondary markets. However, the adherence of these markets to the Code of Good Practices on
Transparency in Monetary and Financial Policies caused a significant increase in the yield spreads. There is no
impact of the adherence to the Code of Good Practices in Fiscal Transparency on the changes of sovereign
spreads. In addition, the results suggest that a debtor country’s internal liquidity factor (measured by the total
reserves to total external debt service ratio) and external liquidity conditions (measured by the yield on US longterm
bond) are the most important determinants of emerging market spreads.