Local currency debt not enough to escape US dollar influence – BIS paper
Emerging markets may not be able to escape the influence of the US dollar even if they borrow in domestic markets using their own currency, according to a new Bank for International Settlements working paper.
In Bond risk premia and the exchange rate, authors Boris Hofmann, Ilhyock Shim and Hyun Song Shin study how shifts in domestic interest rates affect the willingness of international investors to hold bonds issued in domestic currency.
They find an appreciation of an emerging market
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