Working Paper

(WP5/2022) The Currency Composition of Asia’s International Investments

This paper examines the importance of trade ties, macro-financial volatilities, and US dollar trade invoicing in explaining Asia’s international investment assets and liabilities denominated in world currencies, including the US dollar, euro, pound sterling, Japanese yen and Chinese yuan. The results show heterogeneous patterns of relevant covariates across different currencies. More importantly, the estimates offer new evidence that the region hedges its currency risk.

Author(s): Rogelio Mercado, Jr and Paulo Rodelio Halili

Published Date: November 2022

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