Research Paper

(RP111) Foreign Investor Trading and Spillovers to Local-Currency Bond Markets in SEACEN Economies: A Case Study Approach

The aim of this report is to better understand the mechanism of the spillover effects particularly to emerging economies affiliated with South East Asian Central Banks (SEACEN), and draw some policy insights on how the governments can mitigate possible destabilising impacts while retaining benefits from the foreign participation. To this aim, the innovation of this report is to conduct a country case study of SEACEN economies. This approach has merit as a complement to cross-country analysis that assumes a degree of homogeneity, given that the transmission mechanism is inherently complex, interlinked with various country-specific factors such as bond market structure, regulatory framework, and macroeconomic fundamentals. This report covers the following seven SEACEN economies: Malaysia, Thailand, South Korea, Chinese Taipei, Indonesia, Vietnam, and Cambodia (in the order of appearance).

Author(s): Atsuyoshi Morozumi

Published Date: August 2025

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