Abstract
We analyze the sovereign bond issuance data of eight major emerging markets (EMs) - Brazil, China, India, Indonesia, Mexico, Russia, South Africa and Turkey from 1970 to 2018. Our analysis suggests that (i) EM local currency bonds tend to be smaller in size, shorter in maturity, or lower in coupon rate than foreign currency bonds; (ii) EMs are more likely to issue local-currency sovereign bonds if their currencies appreciated before the global financial crisis of 2008 (GFC); (iii) inflation-targeting policy increases the likelihood of issuing local-currency debt before GFC but not after; and (iv) EMs that offer higher sovereign yields are more likely to issue local-currency bonds after GFC. Future data will allow us to test and identify structural changes associated with the COVID-19 pandemic and its aftermath. © 2021 Elsevier Ltd.
| Original language | English |
|---|---|
| Article number | 102442 |
| Number of pages | 14 |
| Journal | Journal of International Money and Finance |
| Volume | 117 |
| Online published | 18 Jun 2021 |
| DOIs | |
| Publication status | Published - Oct 2021 |
| Externally published | Yes |
Funding
We thank the editor, Menzie Chinn, and three anonymous referees for their insightful comments and constructive suggestions. Financial support from the Asian Development Bank, University of Southern California and NUS startup grant are gratefully acknowledged. Donglai Luo provides excellent research assistance.
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
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SDG 10 Reduced Inequalities -
SDG 17 Partnerships for the Goals
Research Keywords
- Emerging market
- Financial crisis
- Local-currency bond
- Original sin
- Sovereign bond
Policy Impact
- Cited in Policy Documents
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