Unconventional Monetary Policies in Emerging Markets and Frontier Countries

How Do the Financial Markets Respond to Emerging Economies’ Asset Purchase Program? Evidence from the COVID-19 Crisis

“…This evidence indicates that asset purchases helped to flatten the yield curve and provide liquidity in the market. These findings confirmed those of Fratto et al (2021), who found that asset purchases have a slight impact on bond yields at medium-and long-term maturities in the case of India. However, the clear impact can be captured through the appropriate econometric estimation; in the next part, this estimation is performed.…”

“…This is the first study in the case of emerging market economies for India and analyzes the impact of the RBI's asset purchase program on various financial variables during the uncertainty produced by the COVID-19 pandemic. The strand of literature to which this study belongs concerns whether the action of the central bank has an impact on financial and macro variables during uncertain times (Blinder et al 2008;Goyal and Arora 2012;Chebbi 2019;Fratto et al 2021).…”

Emerging markets: Prospects and challenges

“…Over 90 percent of EM central banks undertook conventional easing by reducing their policy interest rates ( International Monetary Fund (2020) ), but perhaps more striking was the widespread and unprecedented usage of asset purchase programs among EMs to help ease financial conditions and maintain credit in their domestic economies ( Muhleisen et al (2020b) ). Early evidence suggests that these programs were by and large successful in stabilizing financial markets and reducing bond yields ( Fratto et al, 2021 , World Bank, 2021 ).…”

Harnessing Sovereign Wealth Funds in Emerging Economies toward Sustainable Development

“…Those with ample fiscal buffers, market access, or both were able to deploy greater fiscal support (such as Saudi Arabia and Ghana). In some countries, the credibility of central banks paved the way for cuts in interest rates to first-time lows and engaged in unconventional monetary policy without severe exchange rate pressure (Fratto et al, 2021). Yet, EMs with macroeconomic imbalances or substantial debt burdens continue to face sharp trade-offs between supporting recovery and reducing imbalances (as in the case of Egypt).…”