The Impact of Inflation on Emerging Market Debt

Non-investment rate EMs tend to have shallower local currency debt markets and a smaller domestic savings pool. This means that's funding options and greater reliance on external financing compared to advanced economies or the higher rate of EMs. And as I mentioned earlier, the exposure to foreign currency debt exposes EM debt burdens to sharp local currency depreciation. We've already seen significant depreciation in Sri Lanka, Ghana, Turkey, and Pakistan, Egypt.