The Bank for International Settlement published the statistical results for end-of-March 2018 on global liquidity indicators. The results are summarized as follows.

• US dollar credit to non-bank borrowers outside the United States rose to $11.5 trillion at end-March 2018, up by 7% over the previous year.
• Euro-denominated credit to non-bank borrowers outside the euro area grew at an annual pace of 10%, reaching €3.1 trillion at end-March 2018.
• US dollar credit to emerging market economies (EMEs) rose to $3.7 trillion at end-March 2018. The expansion was fuelled by international debt securities, which grew at an annual rate of 16%.

US dollar and euro credit to non-residents continued to expand

Graph 1: Annual growth of foreign currency-denominated credit to non-resident non-banks. Source: BIS global liquidity indicators.

US dollar credit to non-bank borrowers outside the United States rose to $11.5 trillion at end-March 2018, up by 7%over the previous year (Graph 1). Growth continued to be propelled by debt securities, which increased by 11%. Loans increased at a more modest pace of 3%. Since 2012, the growth of US dollar borrowing in debt securities markets has consistently outpaced that in loan markets. At end-March 2018, debt securities accounted for 52% of outstanding US dollar-denominated credit, up from 44% at end-2011.

Euro-denominated credit to non-bank borrowers outside the euro area also continued to expand at a rapid pace. It grew at an annual rate of 10% as of end-March 2018. The latest increase took its outstanding stock to €3.1 trillion.

Debt securities propelled the growth of US dollar credit to EMEs

Graph 2: Annual growth of US dollar-denominated credit to non-bank borrowers in EMEs. Source: BIS global liquidity indicators

Foreign currency credit to non-bank borrowers in EMEs continued to expand in Q1 2018. US dollar-denominated credit to EMEs grew by 9% in the year to end-March 2018, continuing the steady recovery from the contraction of 2016 (Graph 2). The expansion was fuelled by international debt securities, which grew at an annual rate of 16%. Euro-denominated credit rose by around 11%, similar to its pace in previous quarters.

The US dollar accounted for by far the largest share of outstanding foreign currency credit to non-bank borrowers in EMEs, at $3.7 trillion at end-March 2018, followed by the euro (€644 billion, or about $790 billion) and the yen (¥8 trillion, or $70 billion).