Report
Patrick Artus

Is "yield curve control" in OECD countries an opportunity for emerging countries?

OECD countries are explicitly or de facto switching to "yield curve control", i.e. central banks controlling long-term interest rates. Yield curve control ensures solvency among borrowers, particularly governments. As yields in OECD countries are kept very low on risk-free bonds, but also on risky bonds as investors switch to these bonds, the effect may be to make emerging countries' local currency bonds attractive for investors for a long time to come. Thanks to the very low long-term interest rates in OECD countries, investors could therefore receive a continuous flow of financing from OECD countries, at a reasonable cost, and without taking currency risk .
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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