Economic crises in Turkey and Argentina have led to worries that Asia could be hit by knock-on effects.
Graham Watson's insight:
Recent events in Turkey and Argentina have got some people worrying about the prospects for emerging markets, especially in Asia, and the risk of capital flight triggering depreciation across these countries.
This, of course, has significant macroeconomic effects, especially for countries like India and Indonesia which are reliant on inflows of foreign capital to fund their current account deficits.
What sort of macroeconomic problems might be triggered by a significant depreciation? You might have to look back at the 1997 Asian financial crisis to see.
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Recent events in Turkey and Argentina have got some people worrying about the prospects for emerging markets, especially in Asia, and the risk of capital flight triggering depreciation across these countries.
This, of course, has significant macroeconomic effects, especially for countries like India and Indonesia which are reliant on inflows of foreign capital to fund their current account deficits.
What sort of macroeconomic problems might be triggered by a significant depreciation? You might have to look back at the 1997 Asian financial crisis to see.