MANILA, PHILIPPINES — Local and offshore demand for emerging East Asia’s local currency bonds is rising again and should continue given strong economic growth prospects in the region, said the Asian Development Bank’s (ADB) latest Asia Bond Monitor.
“Most emerging East Asia bond markets have regained their bounce,” said Iwan J. Azis, Head of ADB’s Office of Regional Economic Integration. “Thailand’s bonds though could buck the trend given recent political upheavals and investors there are likely to be cautious for some time.”
Despite the recent improvements, the Asia Bond Monitor warns that markets could still be jolted by the ongoing tapering in US quantitative easing, the slowdown in economic growth in the People’s Republic of China (PRC), or moves by the European Central Bank to counter the threat of deflation. Only by taking the lead in implementing better regulation and oversight of the financial system can Asia mitigate these risks.