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AfDB: Local Currency Bond Issuances of Emerging East Asian Countries Rise Sharply | World

AfDB: Emerging East Asian local currency bond issuance surges (Photo: Reuters)

Hanoi (VNA) Emerging East AsiaTotal local currency bond issuance rose 7.1% to a record high of $9 trillion in 2021, according to the latest issue of the Asia Bond Monitor recently released by the Asian Development Bank ( AfDB).

In the last three months of 2021, the stock of local currency bonds in emerging East Asia rose 3.6% from the previous quarter to $22.8 trillion.

The report highlights discussions on foreign participation in the Asian local currency bond market and the associated risks to financial stability, as well as the determinants of sovereign debt. local currency bond issue in emerging markets. It also presents the results of the 2021 annual bond market liquidity survey “AsianBondsOnline”.

According to AfDB Chief Economist Albert Park, financial conditions in emerging East Asia remain strong, supported by ample liquidity.

Most central banks in the region maintained accommodative monetary policies, even as advanced economies tightened policies. However, continued inflationary pressure could cause more of the world’s central banks to tighten, which could reduce liquidity and weaken financial conditions, he said.

Member economies of the Association of Southeast Asian Nations (ASEAN) saw record local currency bond issuance of $1.5 trillion last year. This accounted for 17% of total issuance in Emerging East Asia, which includes China, Hong Kong (China), Indonesia, Republic of Korea (RoK), Malaysia, Philippines, Singapore, Thailand and Vietnam.

Government bonds outstanding in the region totaled $14.3 trillion at the end of 2021, while corporate bonds increased to $8.5 trillion.

Faster growth in government bond and corporate bond segments pushed Vietnam’s local currency bond market up 9.8% from the previous quarter to reach USD 91.5 billion at the end of December 2021. Annual growth also accelerated, to 25.5%.

The stock of sustainable bonds in the ASEAN region plus China, Hong Kong (China), Japan and the Republic of Korea increased to USD 430.7 billion at the end of 2021, from USD 274.1 billion one year earlier. Green bonds continue to dominate the region’s sustainability bond market, accounting for 68.2% of the total, although interest in social and sustainability bonds is also growing.