Macro Analysis /
Global

High foreign debt holdings make certain EM vulnerable to capital outflows

  • Foreign holdings of domestic government have declined on average across most large EMs

  • Several smaller EMs have seen a sharp rise, including Zambia, Egypt, Colombia, Czechia and Kazakhstan

  • This raises risk of capital outflows if high inflation and DM rate hikes cause a risk-off shift for EM assets in 2022

High foreign debt holdings make certain EM vulnerable to capital outflows
Patrick Curran
Tellimer Research
13 December 2021
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