Please try another search
(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
By Eva Mathews (Reuters) - Tesla (NASDAQ:TSLA) Inc faces a series of hurdles ranging from production snags to rising inflation that may hit profits, Wall Street analysts said on...
LONDON (Reuters) - Sterling plunged to a new March 2020 low against the dollar on Tuesday, extending losses after the resignation of Britain's finance minister threw Prime...
NEW YORK (Reuters) - A U.S. appeals court on Tuesday struck down an order by the Securities and Exchange Commission that would have allowed some financial firms that are not stock...
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.
I feel that this comment is:
Thank You!
Your report has been sent to our moderators for review
Add a Comment
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.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.