Template-Type: ReDIF-Paper 1.0
Author-Name: Mikael Juselius
Author-X-Name-First: Mikael
Author-X-Name-Last: Juselius
Author-Name: Philip Wooldridge
Author-X-Name-First: Philip
Author-X-Name-Last: Wooldridge
Author-Name: Dora Xia
Author-X-Name-First: Dora
Author-X-Name-Last: Xia
Title: Financial channel implications of a weaker dollar for emerging market economies
Abstract: The depreciation of the US dollar in 2025 has occurred against the backdrop of continued resilience of trade and economic activity in emerging market economies (EMEs).
A depreciating dollar affects both borrowers' and foreign investors' balance sheets and tends to loosen financial conditions in EMEs through the risk-taking channel of exchange rates.
As EMEs have increasingly become net creditors to the rest of the world, the currency hedging behaviour of EME investors has played a greater role in currency market dynamics in 2025.
Length: 8 pages
Creation-Date: 2025-10-13
File-URL: https://www.bis.org/publ/bisbull114.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/bisbull114.htm
File-Format: text/html
Number: 114
Handle: RePEc:bis:bisblt:114