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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 416.72+1.2%Dec 26 4:00 PM EST

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To: elmatador who wrote (108861)12/9/2014 6:47:35 AM
From: Haim R. Branisteanu  Read Replies (1) of 218741
 
The emerging problem of foreign currency debt

The BIS issues a timely warning about exchange mismatches

It is not so long ago that many emerging economies, especially those in Latin America, were complaining bitterly about “currency wars”. A decade-long commodity price boom, combined with ultra-loose western monetary policy, flooded the emerging world with capital and pushed up exchange rates to wildly overvalued levels.

Those days are over. International tensions with Russia, concerns about China’s financial stability, a strengthening US economy and, most of all, fast-falling commodity prices have prompted foreign capital to head for the exit. During the past three months, the JPMorgan index of emerging market currencies has fallen by almost 8 per cent against the dollar. But that conceals far sharper falls among some of the weaker currencies. The Brazilian real is down 17 per cent for instance, while the Russian rouble has slumped by nearly half.

ft.com
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