“It’s not a crime to have a current-account deficit, but funding the current account is very sensitive to liquidity conditions,” Steven Englander, global head of G10 foreign-exchange strategy at Citi, said in the article. “We’re talking about a world where there’s been tremendous liquidity for years now, ever since the financial crisis. The liquidity has made it easy to borrow in high-risk asset markets.”
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Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own EEM.