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Question
What is the key difference between "hard currency" and "local currency" emerging market bonds?
1
Hard currency bonds are issued in USD or euros, eliminating local currency risk for the investor; local currency bonds expose the investor to both credit risk and exchange rate movements
2
Local currency bonds are issued by supranational institutions; hard currency bonds are issued by sovereign governments only
3
Hard currency bonds carry higher credit risk; local currency bonds are always investment grade
4
Hard currency bonds have shorter maturities; local currency bonds always have 10+ year maturities
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