## Effects of Emerging Market Asset Purchase Program Announcements on Financial Markets During the COVID-19 Pandemic

_IMF Working Papers, December 18, 2020_

## Source details

**Canonical URL:** [Effects of Emerging Market Asset Purchase Program Announcements on Financial Markets During the COVID-19 Pandemic](https://www.imf.org/en/publications/wp/issues/2020/12/18/effects-of-emerging-market-asset-purchase-program-announcements-on-financial-markets-during-49967)

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## Bibliographic details
- Authors: Can Sever, Rohit Goel, Dimitris Drakopoulos, Evan Papageorgiou
- Published: December 18, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513564661.001

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### Summary findings
- Asset purchase announcements by emerging market central banks during the COVID-19 pandemic:
  - lowered bond yields.
  - did not lead to a depreciation of domestic currencies.
  - did not have much effect on equities.
- The immediate effect of asset purchases appears positive, but the paper emphasizes the need for further consideration of risks and longer-term effects of unconventional monetary policies.
- The study highlights trade-offs involved with implementation and discusses risks associated with asset purchase programs.
- The working paper contributes to the debate on whether asset purchase programs should be a regular part of the emerging market policy toolkit.

### Methodology
- The analysis uses both event studies and local projections methodology to assess effects on domestic financial markets.

### Policy implications and risks
- While early outcomes suggest benefits (lower bond yields without currency depreciation or large equity impacts), policymakers should weigh:
  - trade-offs involved in implementing asset purchase programs.
  - longer-term risks and potential unintended consequences of unconventional monetary policies.

### Subject coverage and keywords
- Subject: Bond yields, Central bank policy rate, Currencies, Stock markets, Yield curve
- Keywords: asset purchase, asset purchase program, bonds, central banks, COVID-19, EM currency, EM equity, emerging markets., equities, foreign exchange, market dynamics, market volatility, pandemic, policy announcement, policy spillover, QE announcement, quantitative easing, WP

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## Content in this bundle

- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2020/12/18/effects-of-emerging-market-asset-purchase-program-announcements-on-financial-markets-during-49967_