DEMO — development content for layout testing. Not real editorial reporting.
DEMO content for development and layout testing — not real editorial reporting.
Researchers describe a global financial cycle in which risk appetite, credit and asset prices move together across countries, often influenced by monetary conditions in the largest economies.
How it works
When global conditions ease, investors tend to seek higher returns in emerging markets; when they tighten, capital can leave quickly, putting pressure on currencies and borrowing costs.
Conditions in major financial centres often shape borrowing costs and capital flows in developing economies.
What to watch
Policy buffers such as foreign-exchange reserves, flexible exchange rates, credible institutions and borrowing in local currency can reduce vulnerability to these swings.
Key concepts
- Emerging markets
- Capital flows
