El-Erian: Emerging-Market Currencies Attractive

The video discusses the Bloomberg and DXY Index, highlighting the weakening of currencies in emerging markets and the potential for a currency crisis. It explores the effects of currency depreciation on inflation and capital outflows, particularly in countries like Turkey, Mexico, and China. The issue of currency mismatch in the corporate sector is examined, emphasizing the risks of borrowing in dollars while earning in local currency. Central banks' interventions to counter excessive depreciation are noted. Finally, investment strategies for 2017 are suggested, focusing on the volatility in foreign exchange markets.

What is the potential risk discussed in relation to the Bloomberg and DXY index?

• An increase in gold reserves

• A decrease in oil prices

• An emerging market currency crisis

• A rise in global stock markets

How can currency depreciation become disruptive according to the video?

• By reducing government debt

• By enhancing export competitiveness

• By increasing tourism

• By causing inflation and capital outflows

Which country is mentioned as experiencing inflation due to currency depreciation?

• Turkey

• Mexico

• India

• China

What is a major concern for the corporate sector in emerging markets?

• Low consumer demand

• Currency mismatch

• Strict government regulations

• High interest rates

What is suggested as an attractive yet volatile investment in emerging markets?

• Real estate

• Foreign exchange

• Technology stocks

• Government bonds