In the wake of the coronavirus epidemic, all too many major emerging market countries - including Brazil, Mexico, South Africa, and Turkey - appear to have embarked on a dangerous monetary policy path. At a time that these economies are experiencing a record pace of capital outflows and their currencies are dropping like a stone, these countries' central banks are choosing to engage in significant monetary policy loosening. By so doing, they are all too likely to accelerate the pace of capital repatriation and to further weaken their currencies.
Past experience with currency crises suggests