Emerging Markets, Debt And The Next Financial Crisis
It is not politics but economics that is pressuring emerging market currencies. The world’s bond vigilantes are concerned about EM dollar-denominated debt, which U.S. rate hikes have made more costly to service. Ten years ago this month, the smallest U.S. investment bank, Lehman Brothers, detonated a global financial crisis when it could not finance its debt. We make no specific predictions, but note that a similar dynamic could play out here: A vulnerable emerging market unable to finance its debt could Learn more about your ad choices. Visit megaphone.fm/adchoices