Emerging Local Currency Bond Markets

John Burger, Francis Warnock and Veronica Warnock

No 16249, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We assess the development of local currency bond markets in emerging market economies (EMEs). Supported by policies and laws that helped to improve macroeconomic stability and creditor rights, many local currency EME bond markets have grown substantially over the past decade and have also provided USD-based investors with attractive returns. U.S. investors have responded by increasing their holdings of EME local currency bonds from less than $2 billion in 2001 to over $27 billion by end-2008. While the increase in U.S. investment spanned many EMEs, empirical tests suggest that relatively more went to those with identifiable investor-friendly institutions and policies.

JEL-codes: F3 G01 G11 G15 (search for similar items in EconPapers)
Date: 2010-08
New Economics Papers: this item is included in nep-ifn
Note: IFM
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Citations: View citations in EconPapers (36)

Published as Burger, J., F. Warnock, and V. Warnock, 2012. "Emerging local currency bond markets." Financial Analysts Journal 68(4): 73-93

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