Dollar-denominated debt in emerging markets is the big exception. If the dollar rises, those debts become more expensive to repay, regardless of the emerging market's underlying economy. That's why Ukraine, Argentina, Turkey and Brazil have seen the recent volatility.
The question is whether these problems are limited to those countries with high dollar debt or whether it could cause a regional capital outflow that reduces economic growth in neighboring countries or trade partners.
The question is whether these problems are limited to those countries with high dollar debt or whether it could cause a regional capital outflow that reduces economic growth in neighboring countries or trade partners.