Emerging Markets Are Peering Over the Precipice
The last thing we need is an emerging markets crisis, yet all the conditions are there: collapsing oil prices, an economic shock, over-indebtedness and fragile currencies.
South Africa on lockdown.
Photographer: RODGER BOSCH/AFPThe financial fallout from the coronavirus is spreading rapidly and that’s ugly news for many developing countries. The risk of contagion, where the collapse of one currency triggers a global panic, is very real.
Outflows from emerging market funds totaled more than $83 billion in March ($53 billion in bonds, $31 billion in equities), according to data from the International Institute of Finance. The last thing the world needs is an emerging markets crisis, yet all the conditions are there: collapsing commodity prices, a sudden economic shock, over-indebtedness and fragile currencies.