EMERGING MARKET FOREIGN DEBT IS NO TIME BOMB: Emerging markets are sitting on a $5.8 trillion pile of debt to foreign lenders. Yet they are far less vulnerable to sudden capital flight than they were two decades ago. Some investors worry about a repeat of the balance-of-payment crises of the 1990s, when foreign lenders rushed headlong into Mexico and Southeast Asian countries, and then turned tail. But this time may be different, and not just because emerging markets now own $7.5 trillion in foreign-exchange reserves. While rising U.S. interest rates are once again pressuring emerging market currencies.That’s because 40 percent of their exposure to developing countries – equivalent to $3.45 trillion – consists of local-currency loans given out by their overseas units.
Posted on: Thu, 26 Sep 2013 05:36:49 +0000
Trending Topics
Recently Viewed Topics
© 2015