Volatile capital flows pose challenges for ASEAN+3 emerging markets. This paper constructs a database of non-resident portfolio flows and develops a framework to assess risks of sudden outflows.
..
Volatile capital flows pose challenges for ASEAN+3 emerging markets. This paper constructs a database of non-resident portfolio flows and develops a framework to assess risks of sudden outflows. The analysis shows that markets with larger non-resident positions are more sensitive to global asset price changes, and positioning affects the size of outflows during stress episodes. Further research is needed to develop a more comprehensive framework.
Challenges of Volatile Capital Flows
Volatile capital flows consistently present challenges for surveillance, policymaking, and investment strategies, especially within ASEAN+3 emerging market economies. Monitoring these capital flows in a timely manner is essential for assessing the vulnerability of equity and debt markets to potential sell-offs by non-resident (NR) investors. Accurate data mapping and risk assessment are vital components in…