EM governments with the largest financing needs are, in theory at least, most vulnerable to a global spike in bond yields. This includes Egypt, Brazil, South Africa and India. However, it’s worth noting that the rise in US government yields over the past week has not triggered a similar rise in EM yields. And in several of the EMs with the largest government financing needs, financial repression will continue to help anchor borrowing costs and sustain large debt burdens.
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