Skip to main Content
Site Search

Advanced Search

  • Mondo Visione
  • Mondo Visione - Worldwide Exchange Intelligence
Member Login

Member Login

Forgotten your password?

BIS: Central Bank Bond Purchases In Emerging Market Economies

Date 02/06/2020

BIS Bulletin  |  No 20  |  
02 June 2020
PDF full text
 (673kb)
  |  9 pages

Key takeaways

  • In response to the Covid-19 shock, many central banks in emerging market economies have launched local currency bond purchase programmes to address bond market dislocations, signalling that they were willing to take the role of a buyer of last resort.
  • Local currency bond yields fell significantly following the programme announcements, with little effect on exchange rates. These positive initial market reactions suggest that the programmes were successful in restoring investor confidence and did not lead to higher inflation expectations, eg due to perceived risks of fiscal dominance.
  • Market reactions varied between countries, depending on initial conditions in each jurisdiction as well as on the scope, scale and communication of the bond purchase programmes.

Online appendix