Tuesday, April 24, 2018

Markets are turning less friendly towards carry trades, which is weighing on EMs with large external funding needs. Earlier this year we scanned EMs for the greatest vulnerabilities. Turkey’s large credit impulse stands out in our cross-country scan as it widens the current account deficit even as funding deteriorates. Even with the large depreciation the Lira has seen in recent years, our models continue to point to the potential for overvaluation.

IIF Authors

Robin Brooks

Robin
Brooks
Managing Director and Chief Economist
@RobinBrooksIIF
rbrooks@iif.com

Ugras Ulku

Ugras
Ulku
Deputy Head of EM Europe Research
+1-202-857-3617
uulku@iif.com

Tariq Khan

Tariq
Khan
Research Analyst
+1 202 857 3339
tkhan@iif.com

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