The external debt burden of many emerging markets surged in 2022 as EM currencies fell against the USD. Given the high risk of cyclical depreciation and ensuing currency mismatch, sovereign debtors raising foreign currency funds should consider appropriate hedging or other risk mitigation tools.

We review the stylized facts of US inflation since the first World War. First, there is no sign that inflation has trended down in the last 100 years...

Portfolio flows to EM stood at $65.7 bn in January. Equity and debt flows were $23.5 bn and $42.2 bn. Chinese equities posted $17.6 bn in inflows. ...

We discuss external bond recovery value scenarios, … consistent with Sri Lanka’s restructuring targets, … while illustrating the importance of Chine...

ESG fund flows have picked up, amid easier financial conditions and growing demand. Global climate flows surpassed $1.1 billion in 2022 - up over 25% from $870 billion in 2021. On average, ESG stocks and bonds are up by some 5% in 2023 ytd. Global sustainable/ESG debt issuance was down over 15% to $1.3 trillion in 2022, from $1.5 trillion in 2021. We project global ESG debt issuance to climb to $1.7 trillion in 2023 and near $2 trillion in 2024.

Last week we wrote about the G7 price cap on Russian oil, … arguing that it’s too early for a definitive assessment of the cap. That’s because the s...

• China experienced a record net portfolio outflow of $80 bln last year. • The outflows were predominantly in bonds, suggesting Fed hikes were the main trigger for the outflows.

The February 2023 U.S. Regulatory Update covers expected changes in Cyber and Economic leadership within the Biden administration, recent activities of U.S. Regulators in the cryptoasset and insurance spaces, new developments on Capitol Hill at the start of the 118th Congress, and more.

This week’s Digital Finance Developments considers the prospects for quantum computing applications in finance and examines the likely timeline for both development and regulation. Quantum computing presents near term opportunities and challenges for finance.

The January 2023 edition of the Global Regulatory Update provides targeted updates on current workstreams and events.

High-yield EM credit has done very well in recent months, … but we remain concerned about quite a few frontier markets. El Salvador’s outlook will r...