Currencies and stock markets are both falling. But is it something we should worry about? Matthew O’Brien of The Atlantic revealed what’s important to understand when looking at the potential currency collapse and how we’ve already experienced it before in 1997.
“We've seen this movie before,” wrote O’Brien. “It was called the East Asian financial crisis, back in 1997. But, for once, the sequel won't be worse than the original. Emerging markets don't have enough foreign-money debt this time around to make their falling currencies much of a concern. What is a concern is whether their central bankers realize this. They might overreact — they might already be — and raise rates to prop up their currencies, when they should be lowering them to prop up their economies.”