Currency choice in international bond issuance
BIS Quarterly Review
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13 June 2005
Aggregate issuance of international bonds is found to be significantly higher in strong currencies than in weak ones. The mix of currencies is also found to be influenced by interest rate differentials, with greater issuance in higher-yielding currencies, and by the amount of home country issuance. Taken together, the results suggest that both the investor's and the issuer's preferences determine currency choice in international bond issuance.
JEL classification: G110, G150, G320.
The views expressed in this publication are those of the authors and do not necessarily reflect the views of the BIS or its member central banks.
