Gubareva, Mariya2020-10-262020-10-2620202184-3325http://hdl.handle.net/10400.21/12294ISCAL Working Papers SeriesWe analyze liquidity of the emerging market (EM) bonds during the Covid-19 fueled uncertainty. Using bid/offer spreads we demonstrate that the apogee of both, liquidity and credit stresses is reached in late-March, and that although liquidity has improved since then, it has not yet returned to the pre-Covid levels. In particular, we find that the EM financials are more resilient to liquidity shocks than the EM corporates and sovereigns. Moreover, we observe a decoupling in the dynamics of the liquidity and credit risk metrics, as credit spreads have been tightening very slowly due to the Covid-19-triggered repricing of default risk.engCOVID-19 pandemicLiquidityEmerging marketsFixed-incomeBid/offer spreadOption-adjusted spread (OAS)working paper