Entries for 'EM Vulnerability'

We see global growth worries as overblown. US data are catching down with elsewhere, but that was inevitable and to be expected, a normal sign of global business cycle swings. We lower our growth forecasts modestly, but continue to see a solid overall picture.

Lesson #1: Don’t engineer an outsize credit boom into a global tightening cycle. Lesson #2: Current account-based estimates of FX fair value are really important. Lesson #3: After a decade of G-3 monetary easing, EM has a positioning overhang. Lesson #4: Imposing a tariff on China is a negative shock that weakens the RMB. Lesson #5: Don’t get hung up on stories the Fed is shifting hawkish. It isn’t.

EM Asian currencies have historically exhibited "fear of floating," with many countries using official intervention to stabilize exchange rates. W

Turkey over the summer experienced a large negative credit impulse, driven by the "sudden stop" in the balance of payments in early August. Exter

We compare FM to EM across key macroeconomic outcomes. FM grew less than EM in the long run but saw lower volatility. FM fell behind in convergence to

The Lira has fallen 30 percent in real terms in recent years, after trend depreciating in real terms for many years prior to that. We screen EM for

The recent Lira sell-off follows many years of trend depreciation, such that the currency is now materially undervalued in our models. Turkey's bal

We scanned EM for external vulnerability earlier this year, and found risk was the highest in Argentina and Turkey. We develop a companion toolkit

A central debate in markets continues to be whether the Dollar will rise or fall. This debate tends to brush over the fact that there are two versions

The recent RMB devaluation is raising fears a currency war is imminent. RMB declines have undone strength from early 2018, a natural up and down. But

The RMB had been on the sidelines of growing trade tensions, but its recent weakness is raising fears of competitive devaluation. We continue to th

We recently estimated an annual financing need around $15 bn for Argentina, on benign assumptions for the current account, debt rollover and capita

EMs with large external funding needs are under pressure. The Turkish Lira is one of the currencies in focus. We present external funding scenarios to

We have been writing on the growing vulnerabilities across EM, where we have been focused on two countries: Turkey and Argentina . Given recent dev

Labor force attachment has been studied extensively for DMs, "¦ where participation has risen among women and older workers. We document key trends in

Mounting trade tensions reflect past and present currency manipulation. We document the "fear of floating" that exists in countries across EM Asia, ..

Demonetization and GST were quasi-natural experiments, with profound and long-lasting impacts on the economy. This meant India missed the synchronized global recovery, but  a rebound is underway from low initial conditions. Broad money has not recovered fully from demonetization, but credit growth and capital flows will support investment. Easing appreciation pressure will be positive for exports, even though structural competitiveness issues remain.

We have been focused on rising risk to emerging markets, especially where idiosyncratic factors point to vulnerabilities . Official intervention ca

Argentina's fiscal position worsened under the Kirchner administration. The current government is committed to redressing the situation, and is imp

Markets are turning less friendly towards carry trades, which is weighing on EMs with large external funding needs. Earlier this year we scanned EM