The Currency Composition of Asia’s International Investments

Paulo Rodelio Halili () and Rogelio Mercado
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Paulo Rodelio Halili: Asian Development Bank

Working Papers from South East Asian Central Banks (SEACEN) Research and Training Centre

Abstract: This paper examines the importance of trade ties, macro-financial volatilities, and US dollar trade invoicing in explaining Asia’s international investment assets and liabilities denominated in world currencies, including the US dollar (USD), euro (EUR), pound sterling (GBP), Japanese yen (JPY) and Chinese yuan (CNY). The results show heterogeneous patterns of relevant covariates across different currencies. More importantly, the estimates offer evidence that the region hedges its currency risk by investing in US dollar denominated assets as greater US dollar trade invoicing significantly covaries with greater debt asset holdings denominated in US dollar.

Keywords: currency composition; international investment assets and liabilities; trade invoicing; bilateral trade; macro-financial volatilities (search for similar items in EconPapers)
JEL-codes: F31 F36 F41 (search for similar items in EconPapers)
Date: 2022-11
New Economics Papers: this item is included in nep-fdg, nep-ifn, nep-mon, nep-opm and nep-sea
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https://www.seacen.org/publications/RePEc/702001-100483-PDF.pdf (application/pdf)

Related works:
Working Paper: The Currency Composition of Asia’s International Investments (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:sea:wpaper:wp49

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