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00:00I do want to start off first on just issuance that we've seen this year when it comes to emerging markets and a lot less of that was dollar issuance. If my data is correct. So we have seen both hard currency issuance, other hot currency issuance as well as local currency debt issuance. It's not a record year, but it's a very solid the year to date. Why are we seeing more local currency issuance? So emerging markets, particularly the major emerging markets, have really worked on developing their local markets. They realize that that can be a shock absorber for various shocks either from abroad or domestically. And a lot of progress has been made there. And what does demand look like on the investor side of things when you think about sort of the shift here between hard and local currencies? I mean, how has that been received by the investment community? Yeah. So what major emerging markets has done is to really develop a buy side in their own country. So what you're seeing nowadays is a mix of global investors together with local investors. And what we are finding is that having those local investors alongside the global investors is really stabilizing the country. And why are we seeing that that that local investor base get built up here? So this is really policy work in the country. So the countries are developing insurance companies and pension funds. And so you have a rich trading environment. Their primary dealers, they're repo markets. All of these things that we are used to in advanced economies like the US is happening more and more in major emerging markets and it's really benefiting them. What does that do to the economic fundamentals look like? And particularly in light of the some of the fractures that we've seen in global trade and or the traditional relationships and global trade? Absolutely. I mean, look at emerging market stock indices, right? We have seen a rally in EM stocks. You know, they're up, you know, about 24, 25% year to date. That's nearly twice as much as the bonds economy. So that's that's, you know, really telling you where where the market is assessing those countries. One issue that we've dealt with a lot over the years when it comes to people investing in emerging markets is the idea that when you start to see a country sort of start to get back on its feet, get its fiscal house in order, sometimes those changes end up being temporary. Either there's some sort of political upheaval that that ushers them out. We're kind of seeing this play out now in Argentina, which, you know, seemed like six months ago. We were all praising some of the measures that they were taking. And now, you know, we're talking about potential bail outs by the United States. Well, I don't want to comment on on the particular country in this interview. But, you know, basically, you know, countries have been able to make the right choices and that is helping them in terms of stability and growth trajectory. But of course, we have also seen countries making other choices. So it's really about having robust policy frameworks in place. I know you don't want to comment on a specific country, but it's hard to not talk about what's going on in France and you just think about you or political turmoil overall, how it's affecting certain countries, certain credits here. And I wonder I mean, you take a look at the developed markets in contrast to the emerging markets and some of the success stories you have here. And I wonder what the balance looks like from where you're sitting. Yeah. So what I would say is that, you know, when we look at the global debt picture, you know, debt has been rising everywhere. And that's true in advanced economies and that's true in emerging markets. So we are in a in the world today compared to five or ten or 15 years ago, where debt levels, sovereign debt levels that much higher. And that makes markets more sensitive and more fragile relative to any political news may be on the good side or the bad side. And we talk about these rising debt levels. And I just always come back to the investor base. We already talked about how you're having a local investor community really get built up here, revitalized. Has that been at the expense of global investors coming into emerging markets or what's going on with that community? I wouldn't put it as an either or. Rather, you know, better market liquidity is benefiting everybody. And so having a better domestic investor base is increasing market liquidity domestically, which is also benefiting global investors. I do have to ask you just about the general role right now of the IMF in sort of facilitating some of those policy changes and more importantly, I guess, providing support for those policy changes. Is it still effective? Oh, absolutely. You know, we're working with all our 191 member countries to strengthen policy frameworks. In some countries that's hands on technical assistance where we really try to help countries build more resilient and stronger and better governance institutions in other countries through surveillance. And in some countries, it's through programs. So, you know, we're there to help the membership.

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IMF’s Adrian on Emerging Market Outlook

Tobias Adrian, the IMF’s Financial Counsellor and Director of the Monetary and Capital Markets Department, says countries that make the right policy choices are seeing stronger stability and growth, while others are falling behind. He tells Romaine Bostick and Katie Greifeld on “The Close” that robust policy frameworks are key. (Source: Bloomberg)

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