Facilitating Foreign Exchange Risk Management for Bond Investments in ASEAN+3
Asian Development Bank | August 2015
Abstract
The Asian Development Bank (ADB) has been working closely with the Association of Southeast Asian
Nations (ASEAN) and the People’s Republic of China, Japan, and the Republic of Korea—collectively
known as ASEAN+3—to foster the development of local currency bond markets and facilitate regional
bond market integration under the Asian Bond Markets Initiative (ABMI). ABMI was launched in 2002 to
strengthen the resilience of the region’s financial system by developing local currency bond markets as an
alternative source to foreign currency denominated short-term bank loans for long-term investment.
Bond investors typically have a long position in local currency bond markets. To manage their foreign
exchange (FX) risk, they may want to hedge that exposure for a period of time. They also want to be sure
they can easily convert the local currency to dollars upon the sale of a bond. This study was undertaken
under ABMI and funded by the Government of Japan. It reviews the FX and FX hedging markets in
ASEAN+3 as they relate to cross-border investments in local currency bonds, and makes recommendations
to facilitate the development of the markets and FX risk management.
Citation
Asian Development Bank. 2015. Facilitating Foreign Exchange Risk Management for Bond Investments in ASEAN+3. © Asian Development Bank. http://hdl.handle.net/11540/5118. License: CC BY 3.0 IGO.PDF ISBN
978-92-9257-057-6
Print ISBN
978-92-9257-056-9
Keywords
Development
Finance
Development Challenges
Regional cooperation and integration
Development Issues
Financial Analysis
Strategic planning
Development plans
Business Financing
International Monetary Relations
International Financial Market
Market
Loans
International banks and banking
Grants
Stock exchanges
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Citable URI
http://hdl.handle.net/11540/5118Metadata
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