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 their foreign reserves have the right idea that they can improve their sovereign creditworthiness by deepening their domestic capital markets.

Governments, banks and companies in Asia or elsewhere borrow abroad because...

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222