The Tug-of-War with Volatility: Policy Options for Emerging Markets

Philip TURNER Directeur adjoint du Département monétaire et économique, Banque des règlements internationaux (BRI). Contact : philip.turner@bis.org.

Very expansionary and non-conventional monetary policy in the advanced economies has suppressed bond market volatility and lowered yields. When this reverses, there may be an outsized impact on emerging market bonds. This paper considers the options open to central banks in the emerging markets – policy rate changes, forex intervention, changes in reserve requirements and interventionist bond market operations.