Asia’s Bonds Face Rising Risks from US Rates, Mid-East Tensions, PRC Property

BEIJING, PEOPLE’S REPUBLIC OF CHINA — Emerging East Asia’s local currency bonds have performed well so far in 2014 but an earlier-than-anticipated US rate hike, a slowing property market in the People’s Republic of China (PRC), and higher risk aversion and inflation due to Middle East tensions could undermine that, says a new report from the Asian Development Bank (ADB).

“Asia looks well placed to face any volatility but the risks are definitely rising,” said Iwan J. Azis, Head of ADB’s Office of Regional Economic Integration. “Higher US interest rates and a stronger dollar could also make it tougher for the rising number of US dollar borrowers to service their debt.”

 

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