Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Emerging Markets Well Placed for Next Shock, Balance Sheets Show

Stock Markets Nov 11, 2019 01:36AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

(Bloomberg) -- Emerging markets now have stronger balance sheets that could serve them well in times of stress after years of buying overseas assets and shifting their foreign liabilities more to equities than debt, according to Oxford Economics.

Many developing nations’ external balance sheets contain assets that are denominated in dollars, so countries benefit from weakness in their own currencies, economists led by London-based Guillermo Tolosa, an adviser at the firm, wrote in a report.

“This can mitigate the negative impact of a strong dollar on commodity prices, world trade, and capital flows,” the authors said.

This shift may be crucial as external vulnerabilities and currency mismatches had been the trigger of EM crises in the past. In a scenario of exchange-rate devaluation, these dollar-denominated assets can become more valuable domestically and create wealth, helping stabilize domestic activities, according to the report.

Risks still abound for many emerging markets, the authors noted. In places like Argentina and South Africa where external positions have improved, there are still considerable sovereign risks.

Get More

  • This Is What Awaits South Africa if Moody’s Cuts Rating to Junk
  • Argentina’s Election and Currency Controls: All You Need to Know

Emerging Markets Well Placed for Next Shock, Balance Sheets Show
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Dietmar Stahl
Dietmar Stahl Nov 11, 2019 2:12PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
US debt ceiling can trigger a world wide Grand Depression style downturn because there is money left to borrow or pay back. Governments could make it end up in a China USA war or a WW3 to destroy everything, get rid of over population and then rebuild the economy!
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email