El Nino to compound drag on South-east Asian debt, analysts say
Benchmark bond yields across South-east Asia are vulnerable to further increases.
El Nino could exacerbate the downward pressure on South-East Asian debt, according to analysts. The weather phenomenon is driving food inflation, which could lead to higher yields on regional bonds. Economies like the Philippines and Thailand, which have high food inflation weightings, are particularly vulnerable. The risk is also heightened by rising US Treasury rates and oil prices. A resurgent El Nino could push yields even higher, threatening the stability of regional debt markets.
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