Prudent Policies Help Emerging Markets Avoid Expected Debt Crisis

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.

Loose fiscal policy in the US and China has helped mitigate the impact of tight monetary policy.

Emerging market central banks have focused on independence and getting ahead of rate hikes in advanced economies.

Regulations reduced currency mismatches and reporting requirements improved understanding of risks.

Argentina and Venezuela rejected IMF guidelines and experienced catastrophic results, showing the value of macroeconomic conservatism.