Goldman Spillover Index Signals Lira Contagion Risk Limited
- Moves in EM currencies smaller than what the gauge predicted
- Goldman says that ‘further spillovers should be limited’
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Emerging-market investors worried about potential contagion from Turkey’s deepening crisis may find some solace in Goldman Sachs Group Inc.’s spillover index.
With the exception of Russia’s ruble, recent moves in developing-nation currencies have generally been smaller than what the gauge predicted despite the Turkish lira’s plunge, Goldman Sachs said in a report dated Aug. 10. It used analysis of the recent slump in Argentina’s peso to estimate the lira’s impact on its emerging-market peers.