Sanctions and Sovereign Credit
Prof. Huanhuan ZHENG
Associate Professor, Department of Public and International Affairs, City University of Hong Kong
Date: 20 April 2026 (Monday)
Time: 10:30-12:00
Venue: E22-G004
Host: Prof. Brenda ZHANG, Associate Professor in Business Economics
Abstract
This paper examines the impact of sanctions on a country’s ability to access international credit markets, a critical issue given the increasing use of sanctions globally. We analyze how sanctions contribute to wider fiscal deficits and subsequently influence sovereign borrowing capabilities. Our findings reveal that both domestic and international investors reduce their holdings of sovereign debt in sanctioned countries, with foreign investors cutting back more sharply. The effects are particularly severe when sanctions do not achieve their intended goals, prompting retaliatory measures by the sanctioned nations. Additionally, the restriction on access to credit is exacerbated when sanctions are multi-national, originate from Eastern Bloc countries, are intended to prevent conflict, or are prolonged and intense. This study highlights the complex repercussions of sanctions on the financial stability of nations, emphasizing the need for nuanced policy considerations in the current geopolitical climate.
Speaker
Prof. Huanhuan ZHENG is a scholar of sovereign financial governance at City University of Hong Kong. Her research studies how governments borrow, manage, and govern sovereign debt in a changing global order— from dollar dominance and sovereign debt sustainability to climate finance and fiscal redistribution.
All are welcome!
