The Development of Local Currency Bond Markets and Uncovered Interest Rate Parity
Copyright policy )The Development of Local Currency Bond Markets and Uncovered Interest Rate Parity
This working paper shows how deviations in uncovered interest rate parity (UIP) decrease as local currency bond markets develop and the presence of nonbank financial institutions expands. Analyzing the period from 1996-2022, it draws on market data from 11 advanced economies including Japan and the United Kingdom, and eight emerging market economies such as India and Thailand. Assessing the growth of nonbank financial institutions alongside the role of foreign investors in local currency bond markets, it shows how UIP premium patterns in emerging market economies merge with those in advanced economies.
- Korea University Korea (Republic of)
- Asian Development Bank Philippines
uncovered interest parity, ddc:330, nonbank financial institutions, local currency bond markets, capital inflows, E44, G21, F34, G12, G23, F62, emerging economies
uncovered interest parity, ddc:330, nonbank financial institutions, local currency bond markets, capital inflows, E44, G21, F34, G12, G23, F62, emerging economies
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