Emerging East Asian Local Currency Bond Markets: A Regional Update
Issue: September 2023
Financial conditions marginally improved in most emerging East Asian markets between 1 June and 31 August, on sound economic fundamentals and regional monetary tightening cycles approaching their end, according to the September 2023 issue of the Asia Bond Monitor. During the review period, most regional economies saw risk premiums narrow, equity markets rise, and portfolio capital flow into bond markets. Local currency bonds outstanding in the region reached USD23.1 trillion at the end of June, on new issuance of USD2.4 trillion during Q2 2023. The ASEAN+3 sustainable bond market reached USD694.4 billion. Still-high interest rates in most regional markets pose risks to public and private sector borrowers with weak balance sheets and governance.