Global Spillovers into Domestic Bond Markets in Emerging Market Economies
Electronic Access:
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Summary:
While fiscal conditions remain healthier than in advanced economies, emerging economies continue to be exposed to negative spillovers if global conditions were to become less favorable. This paper finds that domestic bond yields in emerging economies are heavily influenced by two international factors: global risk appetite and global liquidity. Using a novel approach, the analysis goes on to show that the vulnerability of emerging economies to these factors is not uniform but rather depends on country specific characteristics, namely fiscal fundamentals, financial sector openness and the external current account balance.
Series:
Working Paper No. 2013/264
Subject:
Asset and liability management Bond yields Emerging and frontier financial markets Financial institutions Financial markets Financial services Fiscal policy Fiscal stance International liquidity Short term interest rates
English
Publication Date:
December 23, 2013
ISBN/ISSN:
9781484328446/1018-5941
Stock No:
WPIEA2013264
Pages:
21
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