Turbulent times ahead for foreign currency debtors in emerging markets

In view of the imminent tightening of US monetary policy, the favourable financing environment that emerging markets have enjoyed since the start of the financial crisis could deteriorate significantly. A systemic crisis is not expected but some countries with external vulnerabilities may suffer more than others from the forthcoming cycle of rising interest rates. Exchange rates have already started to shift, placing increasing pressure on foreign currency debtors. Private debt in emerging markets has grown very strongly since 2007 and in some economies represents a threat to financial stability.

Turbulent times ahead for foreign currency debtors in emerging markets(PDF, 76 KB, non-accessible)