Emerging Local Currency Bond Markets

40 Pages Posted: 10 Aug 2010 Last revised: 27 May 2023

See all articles by John D. Burger

John D. Burger

Loyola University Maryland - Department of Economics

Francis E. Warnock

University of Virginia - Darden Business School; National Bureau of Economic Research (NBER)

Veronica Cacdac Warnock

Darden Business School

Date Written: August 2010

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.

Suggested Citation

Burger, John D. and Warnock, Francis E. and Warnock, Veronica Cacdac, Emerging Local Currency Bond Markets (August 2010). NBER Working Paper No. w16249, Available at SSRN: https://ssrn.com/abstract=1654236

John D. Burger (Contact Author)

Loyola University Maryland - Department of Economics ( email )

4501 N. Charles St
Baltimore, MD 21210
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410-617-5831 (Phone)
410-617-2118 (Fax)

Francis E. Warnock

University of Virginia - Darden Business School ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-6076 (Phone)

HOME PAGE: http://faculty.darden.virginia.edu/warnockf/index.htm

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138-5398

Veronica Cacdac Warnock

Darden Business School ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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