The financing needs of emerging marketsare enormous. Sectors such as infrastructure, smallbusiness, and housing are vital to a nation’s sustainabledevelopment and require substantial financing support. Sincethese sectors primarily generate revenues in local currency,foreign currency financing may incur a mismatch that canexpose emerging market borrowers to exchange rate risk intimes of high volatility. Local currency bond issuance is asignificant potential option that avoids such risks and cansupport private sector investment in productive sectors ofemerging markets.