Emerging East Asian Local Currency Bond Markets: A Regional Update
Issue: November 2023
Financial conditions weakened and bond yields rose in most emerging East Asian markets between 1 September and 10 November amid expectations that the US Federal Reserve will keep interest rates elevated for an extended period, according to the November 2023 issue of the Asia Bond Monitor. Furthermore, an uptick in oil and food prices during recent months has pushed up inflation in some regional economies. Local currency bonds outstanding in the region reached USD23.5 trillion at end of September on issuance of USD2.5 trillion in Q3 2023. The ASEAN+3 sustainable bond market reached USD734.1 billion. Overall risks remain balanced, with downside risks associated with high US interest rates potentially offset by expected moderation in inflation next year.