Asia's local bond markets expand 16.5% in 2009: ADB report

MANILA, March 25 (Xinhua) -- Local currency bond markets in emerging East Asia expanded 16.5 percent in 2009, with 4.4 trillion U.S. dollars in paper outstanding at the end of December,and should continue to grow in 2010, according to the Asian Development Bank's (ADB) quarterly Asia Bond Monitor.

The main driver of growth last year was rapid expansion in markets in Hong Kong, China; Thailand; and Indonesia. The Hong Kong, China market soared 55.8 percent largely due to the hefty issuance of Exchange Fund Bills and Notes by the Hong Kong Monetary Authority for monetary policy purposes, the report said.

The Thai and Indonesian local currency bond markets posted rapid growth rates of 20.5 percent and 19.4 percent, respectively.

"Asia's local currency bond markets expanded at a faster pace in 2009 than they did in 2008 in large part because most governments sold paper to finance spending to counter the ill effects of the global financial crisis," said Srinivasa Madhur, Senior Director in ADB's Office of Regional Economic Integration, which compiled the report.

Asia's local currency bond markets expanded 14.8 percent in local currency terms in 2008 versus 2007.