The rise in foreign currency bonds: The role of US monetary policy and capital controls

• 成果类型: Article
• 署名作者: Bacchetta, Philippe; Cordonier, Rachel; Merrouche, Ouarda
• 署名单位: University of Lausanne; Swiss National Bank (SNB)
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2022.103709
• 发表日期: 2023
• 关键词: Foreign currency; Corporate bonds; Emerging markets; capital controls; Currency risk

摘要

An unintended consequence of loose US monetary policy is the increase in currency risk exposure abroad. Using firm-level data on corporate bond issuances in 16 emerging market economies (EMEs) between 2003 and 2017, we find that EME companies are more likely to issue bonds in foreign currency when US interest rates are low. This effect is driven by nonexporters. Interestingly, capital controls on bond inflows significantly decrease the likelihood of issuing in foreign currency and can even eliminate the adverse impact of low US interest rates. In contrast, macroprudential foreign exchange regulations increase foreign currency issuances among nonfinancial companies. (c) 2022 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).