External positions a concern not just for “BIITS”

The currencies of the so-called “BIITS” (Brazil, India, Indonesia, Turkey and South Africa) have been singled out as being particularly vulnerable to a tightening of global monetary conditions. This is on account of their respective countries’ large current account deficits. But the currencies of EMs whose external positions have deteriorated substantially (irrespective of whether they run deficits or surpluses) also appear to be exposed to weaker capital inflows. These include Russia, Malaysia, Chile and Peru.