Exploring the Role of Foreign Investors in Russia's Local Currency Government Bond (OFZ) Market

Exploring the Role of Foreign Investors in Russia's Local Currency Government Bond (OFZ) Market
Author: Yinqiu Lu
Publisher: International Monetary Fund
Total Pages: 37
Release: 2017-02-20
Genre: Business & Economics
ISBN: 1475579756

Local currency government bonds (OFZ bonds) are an important fixed-income instrument in Russia’s financial markets. In this paper, based on granular data, we explore the development of the OFZ bond market with a focus on foreign investors. As this fixed-income market has experienced a liberalization of the domestic trading and settlement infrastructure, and weathered several episodes of market stresses since the 2008–09 global financial crisis, the role of foreign investors can be observed along with these events. What we have found is that foreign investors had influenced the market before they became an important player and since then they have contributed to the development of the market while not necessarily destabilizing it in episodes of shocks.

Exploring the Role of Foreign Investors in Russia's Local Currency Government Bond (OFZ) Market

Exploring the Role of Foreign Investors in Russia's Local Currency Government Bond (OFZ) Market
Author: Yinqiu Lu
Publisher: International Monetary Fund
Total Pages: 37
Release: 2017-02-10
Genre: Business & Economics
ISBN: 1475577583

Local currency government bonds (OFZ bonds) are an important fixed-income instrument in Russia’s financial markets. In this paper, based on granular data, we explore the development of the OFZ bond market with a focus on foreign investors. As this fixed-income market has experienced a liberalization of the domestic trading and settlement infrastructure, and weathered several episodes of market stresses since the 2008–09 global financial crisis, the role of foreign investors can be observed along with these events. What we have found is that foreign investors had influenced the market before they became an important player and since then they have contributed to the development of the market while not necessarily destabilizing it in episodes of shocks.

Nonresident Capital Flows and Volatility: Evidence from Malaysia’s Local Currency Bond Market

Nonresident Capital Flows and Volatility: Evidence from Malaysia’s Local Currency Bond Market
Author: Mr.David A. Grigorian
Publisher: International Monetary Fund
Total Pages: 19
Release: 2019-01-25
Genre: Business & Economics
ISBN: 1484396553

Malaysia’s local currency debt market is one of the most liquid public debt markets in the world. In recent years, the growing share of nonresident holders of debt has been a source of concern for policymakers as a reason behind exchange rate volatility. The paper provides an overview of the recent developments in the conventional debt market. It builds an empirical two-stage model to estimate the main drivers of debt capital flows to Malaysia. Finally, it uses a GARCH model to test the hypothesis that nonresident flows are behind the observed exchange rate volatility. The results suggest that the public debt market in Malaysia responds adequately to both pull and push factors and find no firm evidence that nonresident flows cause volatility in the onshore foreign exchange market.

Instruments, Investor Base, and Recent Developments in the Malaysian Government Bond Market

Instruments, Investor Base, and Recent Developments in the Malaysian Government Bond Market
Author: MissYinqiu Lu
Publisher: International Monetary Fund
Total Pages: 33
Release: 2018-04-26
Genre: Business & Economics
ISBN: 1484353099

Foreign holdings of Malaysian local currency (LCY) government bonds have increased since the global financial crisis. By exploring the micro-level bank by bank and fund by fund data, we are able to shed light on the key features of the LCY government bonds including their investor base. The data suggest that to gain exposure to the Malaysian credit, holding cash bonds is generally only one part of the strategy of foreign investors and in many cases FX derivatives are involved. The availability of an efficient FX derivatives market could help to attract a wider range of foreign investors and enrich the bond market. Meanwhile, the analysis of the risk related to the foreign ownership ideally could also cover the role of derivatives. The analysis also allows us to conclude that despite the importance of foreign investors, domestic participants, as the core investor base, could help to ensure the stability and proper functioning of the bond market.

Indonesia

Indonesia
Author: International Monetary Fund. Asia and Pacific Dept
Publisher: International Monetary Fund
Total Pages: 28
Release: 2023-06-25
Genre: Business & Economics
ISBN:

Indonesia: Selected Issues

Non-Resident Holdings of Domestic Debt in Nigeria: Internal or External Driven?

Non-Resident Holdings of Domestic Debt in Nigeria: Internal or External Driven?
Author: Amr Hosny
Publisher: International Monetary Fund
Total Pages: 21
Release: 2020-05-22
Genre: Business & Economics
ISBN: 151354537X

Foreign holdings of domestic debt instruments in Nigeria have been increasing. Using data over 2007M1-2019M1, we show that, on average, global factors (global interest rates, oil prices) seem to carry more weight than domestic factors (treasury bills rate and domestic risk) in foreign portfolio invetsors’ decisions in Nigeria. Specifically, we show that foreign participation is, in the long run, positively correlated with oil prices and profitable rates of return on local-currency instruments, but negatively correlated with exchange rate depreciation pressures. In the short run, oil prices, opportunity cost of funds and perception of Nigeria-specific risks also play a role. These results highlight the volatile short-term nature of such flows and call for a package of policy reforms to attract longer term direct investments.

The Evolution of Public Debt Vulnerabilities In Lower Income Economies

The Evolution of Public Debt Vulnerabilities In Lower Income Economies
Author: International Monetary Fund. Strategy, Policy, & Review Department
Publisher: International Monetary Fund
Total Pages: 56
Release: 2020-02-10
Genre: Business & Economics
ISBN: 1513529110

Public debt in lower-income economies (LIEs) has risen in recent years, with half of the countries covered in this report now assessed to be at high risk of or already in debt distress.

IMF Research Bulletin, Summer 2017

IMF Research Bulletin, Summer 2017
Author: International Monetary Fund. Research Dept.
Publisher: International Monetary Fund
Total Pages: 19
Release: 2017-08-11
Genre: Business & Economics
ISBN: 1484315448

The Summer 2017 issue of the IMF Research Bulletin highlights new research such as recent IMF Working Papers and Staff Discussion Notes. The Research Summaries are “Structural Reform Packages, Sequencing, and the Informal Economy (by Zsuzsa Munkacsi and Magnus Saxegaard) and “A Broken Social Contract, Not High Inequality Led to the Arab Spring” (by Shantayanan Devarajan and Elena Ianchovichina). The Q&A section features “Seven Questions on Fintech” (by Tommaso Mancini-Griffoli). The Bulletin also includes information on recommended titles from IMF Publications and the latest articles from the IMF Economic Review.

Financial Transition in Europe and Central Asia

Financial Transition in Europe and Central Asia
Author: Alexander Fleming
Publisher: World Bank Publications
Total Pages: 302
Release: 2001-01-01
Genre: Business & Economics
ISBN: 9780821348147

This book contains 21 papers focusing on a wide range of issues concerning financial sector transition in the countries of Europe and Central Asia (ECA). It places the transition economies in the context of recent and prospective developments in global financial markets. This book also evaluates the experience of the last 10 years and reviews the progress from a command financial system to a market-based one, identifying some of the key characteristics of the financial transition.