The policy turnarounds that have continued in Argentina, Egypt, Nigeria and Turkey have led to a sharp reduction in sovereign risk premia but have had mixed success in restoring macroeconomic stability so far. We remain most optimistic on the outlook for Turkey and Egypt and have become more confident for Argentina, although managing the extremely overvalued exchange rate will be a challenge. We remain most concerned about the policy shift in Nigeria amid the serious lack of appetite for fiscal reform.
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