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How big a risk is the rise in EM sovereign FX debt?

A surge in sovereign foreign currency debt issuance over the past 18 months has made Argentina’s recent economic turmoil worse and has contributed to the tensions that have arisen in Bahrain’s financial markets over the last few days. There are also reasons to be concerned about the scale of recent FX debt issuance in a few other countries, including Egypt, Lebanon and Oman, but this isn’t an EM-wide issue.

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