EM currency risk profile in a new era

From the Financial Times:

Article produced by Guillermo Tolosa, Economic Consultant for Oxford Economics

"There are good reasons why emerging markets are back in fashion. Here we focus on recent developments and long-term macroeconomic trends that have been shaping a new risk landscape for the EM asset class."

"The key factor for explaining the behaviour of EM currencies is non-resident capital flows. Such flows have come in three distinct long-term waves over the past 40 years, each of which has consisted of several years of surges in flows followed by a similarly long period of declines."

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