Local currency yield premium moderates to pre-pandemic levels

  • After surging in 2021, spread between local currency and hard currency yields in EM has moderated to pre-pandemic levels

  • Among 30 EM, LCY-HCY yield differential exceeds 4% in 5 countries and 2% in 11, while 11 have negative differential

  • Data set screens for countries that lack sufficient LCY yield pickup to compensate for currency, liquidity or legal risk
January 18th, 2023
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