The Asian Bond Fund's currency conundrum

Asian central banks'' attempt to improve regional bond markets is hampered by fixed exchange rate regimes, says S&P.

While the initiative by Asian central banks to improve the regional bond markets via pooling reserves to invest in local markets has merit, it may not work as long as the region maintains fixed currency regimes, warns a recent report by Standard Poor's.

John Chambers, a credit analyst at SP in New York, says the 11 central banks and monetary organizations in the Asia-Pacific region that set up the $1 billion Asian Bond Fund from...

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