Tracking Global Demand for Emerging Market Sovereign Debt


Serkan Arslanalp ; Takahiro Tsuda

Publication Date:

March 5, 2014

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate


This paper proposes an approach to track US$1 trillion of emerging market government debt held by
foreign investors in local and hard currency, based on a similar approach that was used for advanced
economies (Arslanalp and Tsuda, 2012). The estimates are constructed on a quarterly basis from 2004
to mid-2013 and are available along with the paper in an online dataset. We estimate that about half a
trillion dollars of foreign flows went into emerging market government debt during 2010–12, mostly
coming from foreign asset managers. Foreign central bank holdings have risen as well, but remain
concentrated in a few countries: Brazil, China, Indonesia, Poland, Malaysia, Mexico, and South
Africa. We also find that foreign investor flows to emerging markets were less differentiated during
2010–12 against the background of near-zero interest rates in advanced economies. The paper extends
some of the indicators proposed in our earlier paper to show how the investor base data can be used to
assess countries’ sensitivity to external funding shocks and to track foreign investors’ exposures to
different markets within a global benchmark portfolio.


Working Paper No. 2014/039



Publication Date:

March 5, 2014



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