It is not politics but economics that is pressuring emerging market currencies. The world’s bond vigilantes are concerned about EM dollar-denominated debt, which U.S. rate hikes have made more costly to service. Ten years ago this month, the smallest U.S. investment bank, Lehman Brothers, detonated a global financial crisis when it could not finance its debt. We make no specific predictions, but note that a similar dynamic could play out here: A vulnerable emerging market unable to finance its debt could
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