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Determinants of Sovereign Bond Issuance in Emerging Markets

Author

Listed:
  • Wong, Ka Lok
  • Manger, Mark
  • Panizza, Ugo

Abstract

Emerging market economies (EMEs) regularly tap domestic and international capital markets through scheduled sovereign bond auctions. In this paper, we leverage a novel dataset covering over 75,000 sovereign issuance events and 20,000 securities from 20 EMEs between the early 2000s and 2023 to analyze the determinants of bond issuance choices, focusing on volume, maturity, and currency denomination. We find that local currency debt issuance is largely associated with refinancing needs, while foreign currency issuance reflects more strategic and cyclical considerations. In particular, foreign currency issuance correlates with global macroeconomic conditions, interest rate differentials, and investor sentiment. Our findings suggest that EME governments differentiate their debt management strategies based on the currency of issuance, with local currency issuance shaped by domestic budget mechanics and foreign currency issuance by external constraints and opportunities.

Suggested Citation

  • Wong, Ka Lok & Manger, Mark & Panizza, Ugo, 2026. "Determinants of Sovereign Bond Issuance in Emerging Markets," CEPR Discussion Papers 21251, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:21251
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    File URL: https://cepr.org/publications/DP21251
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    More about this item

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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