What Is a Foreign Bond and What Relevance Does It

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The Answer is Foreign bonds were bonds issued in a particular country,say the United States,denominated in the currency of the United States,the USD,but issued by an entity that was not considered to be a domestic (U.S. )issuer.For instance,if the Bank of China issued a bond in the United States denominated in the USD,the bond would be considered to be a foreign bond.While foreign bonds are still issued as part of international finance,a similar,but in important aspects different instrument,has supplanted the foreign bond to some extent.Eurobonds are issued by a foreign issuer (not considered to be an issuer in the country where the bond is issued)in a country but are issued,not denominated in the currency of the country where they are issued,but are denominated in another currency that is not the currency of the country where they are issued or the currency of the issuer.For instance,if the Bank of China issued a bond in the United States denominated in euros,the bond would be considered to be a Eurobond.Both the foreign bond and the Eurobond represent the flexibility that issuers of bonds have in targeting their markets and in taking advantage of the relative strengths or weaknesses of various currencies.

What Is a Foreign Bond and What Relevance Does It

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