Fiscal deficits in the big emerging economies are largely being financed domestically (with domestic debt bought by domestic investors)

Useful (and BoP consistent) story from @markets

1/x https://www.bloomberg.com/news/articles/2020-08-24/massive-borrowing-sparks-rare-divergence-in-indonesia-bonds-fx?srnd=fixed-income

A little too much is being made of the data on fx issuance, which has been fairly strong for inv. grade issuers --

a) lots of the (net) issuance is from countries that have plenty of assets and don't need the money;
b) outflow from local markets hasn't been reversed

2/x

fx bonds should normally be a relatively modest share of the funding of most emerging economies --

otherwise, countries end up with big balance sheet risks.

Argentina's Macri era fx borrowing binge is a case in point.

and demand local currency bonds hasn't bounced back

3/3