–Local currency bond markets are increasingly becoming animportant source of domestic finance.•Policy measures implemented by East Asia since the 1997financial crisis include:–Strengthening the legal and regulatory framework,–Improving the bond issuing process and pricing mechanisms,–Promoting demand for local currency bonds,–Improving market infrastructure, and–Promoting regional cooperation in developing bond markets.•Going forward, improving market liquidity is a key challenge. Thefollowing measures could be considered:–Broadening the variety of fixed-income securities,–Introducing When-Issued (WI) trading,–Introducing Separate Trading of Registered Interest andPrincipal of Securities (STRIPS), and–Developing derivatives markets.
Acronyms, Abbreviations, and Notes
ABFAsia Bond FundABMAsia Bond MonitorABMIAsian Bond Markets InitiativeADBAsian Development BankAECMAggregate Effective CurrencyMismatchALBIAsian Local Bond IndexASEANAssociation of Southeast AsianNations (Brunei Darussalam,Cambodia, Indonesia, LaoPeople’s Democratic Republic,Malaysia, Myanmar, Philippines,Singapore, Thailand, andViet Nam)ASEAN+3ASEAN, People’s Republic of China, Japan, Republic of KoreaCSIcontractual savings institutionEMEAPExecutives’ Meeting of EastAsia Pacific Central BanksEU15Austria, Belgium, Denmark,Finland, France, Germany,Greece, Ireland, Italy,Luxembourg, Netherlands,Portugal, Spain, Sweden, andUnited Kingdom (the 15members of the European Unionprior to 1 May 2004)GDPgross domestic productGPFGovernment Pension FundSTRIPSSeparate Trading of RegisteredInterest and Principal of SecuritiesWIWhen-IssuedNotes:1.“$” denotes US dollars unless otherwisespecified.2.Growth rates are year-on-year unlessotherwise specified.The
Asia Bond Monitor
is prepared by theRegional Economic Monitoring Unit of theAsian Development Bank (ADB) and does notnecessarily reflect the views of ADB's Boardof Governors or the countries they represent.