This paper presents a new dataset on emerging market sovereign bonds, which distinguishes between the currency of denomination and the residence of investors. The dataset covers long-term government bonds and provides a more complete coverage of bonds issued in domestic markets. The authors document several trends, including the fact that a preponderance of foreign currency bonds is associated with greater holdings by foreign investors, but the correlation is weak at best. Over time, emerging market governments have enhanced their ability to borrow abroad in their own currency, reducing their reliance on foreign investors. The paper suggests that emerging market governments should focus on building their own domestic bond markets to reduce their reliance on foreign investors and mitigate the risks associated with original sin.
