Debt Buildup and Currency Vulnerability: Evidence from Global Markets

Publication | October 2020

This paper examines how debt buildup is related to currency depreciation pressure. It highlights the importance of a debt surveillance framework that monitors both public and private debt buildup, especially in emerging markets.

The study analyzes a panel dataset of 59 advanced and emerging markets. It finds that both private and public debt exacerbate currency vulnerability, though the evidence of a significant effect on currency depreciation pressure is more robust and consistent for private debt. The authors also find that excessive private debt buildup can be particularly harmful in emerging markets.


  • The Debt Buildup in Emerging Markets in the Aftermath of the Global Financial Crisis
  • Debt, Recession, and Financial Stability: A Literature Review
  • Empirical Methodology and Data
  • Debt Buildup and Currency Vulnerability: The Empirical Evidence
  • Conclusion and Policy Implications

Additional Details

  • Economics
  • Finance sector development
  • Financial markets and institutions
  • Governance and public sector management
  • Public financial management
  • 28
  • 8.5 x 11
  • WPS200289-2
  • 2313-6537 (print)
  • 2313-6545 (electronic)

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