Prudent Policies Help Emerging Markets Avoid Expected Debt Crisis
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Emerging markets have not experienced the expected debt crisis despite economic challenges like rising interest rates. This is due to prudent policies like accumulating foreign reserves.
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Loose fiscal policy in the US and China has helped mitigate the impact of tight monetary policy.
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Emerging market central banks have focused on independence and getting ahead of rate hikes in advanced economies.
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Regulations reduced currency mismatches and reporting requirements improved understanding of risks.
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Argentina and Venezuela rejected IMF guidelines and experienced catastrophic results, showing the value of macroeconomic conservatism.
