Rising global debt levels are a “cause for concerns” for EMs

The rise of global debt to over USD 247 tn alongside tightening financial conditions is a “cause for concern” for EMs, Jonathan Wheatley writes for the Financial Times. According to the Institute of International Finance (IIF), appetite for currencies and bonds in EM including Argentina, Turkey, and Brazil has been on a downwards trend as “the vulnerability of countries with high inflation and large current account and budget deficits” become increasingly evident. “When you combine a rising rate environment, stronger [USD] and low levels of liquidity, you have a recipe for volatility and the exacerbation of any periods of market strain,” says IIF Senior Director Sonja Gibbs.