Emerging-Market Currencies: Things Look to Get Worse

``Many investors believe the Fed will raise short-term interest rates this year for the first time since 2006, intensifying the strain on developing nations that in many cases already are struggling with slowing growth, substantial debt and crumbling demand for the commodities that are at the heart of many of their domestic economies. Turkey and Brazil are considered especially vulnerable by many investors, thanks to economic imbalances that will likely be exacerbated by the declines of their currencies. Turkey's external debt, or debt borrowed from foreigners, as a percentage of its gross domestic product is among the highest of all emerging countries, while Brazil is facing problems including weaker commodity prices, sluggish Chinese demand for its goods and the government's struggles to cut spending without hitting revenue. Yet many analysts said that a full-blown crisis like the one that hit developing nations in the late 1990s appears unlikely [thanks to measures adopted since then]...''