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Which EMs are most at risk from dollar strength?

The US dollar’s recent strong run has raised concerns that EMs with large holdings of dollar-denominated debt will come under pressure. Indeed, India’s central bank governor,Raghuram Rajan, has gone so far as to warn that borrowing in US dollars “is like playing Russian roulette”. We think that for most EMs, dollar debts are manageable but several – appropriately enough including Russia – are playing a risky game.


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