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Some of the larger private sector borrowers in these countries issue bonds outside of their home markets because there's not enough credit risk appetite for the volume of funding sought.
But insufficient demandfor local currency assets isn't the reason behind issuing abroad. Rather, it's a lack of investors with sufficient skills and resources to analyze the credit risk involved.

This is a key reason that much private sector bond issuance from developing markets is primarily denominated in U.S. dollars or euros. It also allows investors to avoid undeveloped or restrictive regulatory environments.

These factors also highlight policy issues that need to be addressed. To develop local currency markets, specifically for private sector borrowers but also for government sector borrowers, the policy challenges are: -