Emerging Markets Capital Flows At Risk
“There is more risk of greater cyclicality in capital flows to emerging economies in the next 18–24 months than seemed likely a few months ago … Policymakers in emerging economies may have a long enough memory to avoid some of the pitfalls associated with such a boom-bust cycle in flows, but not all may be quite so restrained, especially in capital-hungry, low-income economies. Nor is it likely that investors will be quite so disciplined. The risk of market participants being unprepared for a reversal of rates is real and needs to be seriously considered to avoid disruption.”
– Institute of International Finance
Emerging Markets Economies: Capital Flows ($ billion)
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