The dollar and international capital flows in the COVID-19 crisis. 03/04/2020
Corsetti, Giancarlo ; Marin, Emile
Centre for Economic Policy Research, London
CEPR - London
2020
capital flow ; epidemic disease ; currency
Financing and monetary policy
https://voxeu.org/article/covid-19-crisis-dollar-and-capital-flows
English
"In crises, the dollar tends to appreciate – especially against emerging market currencies – and dollar liquidity becomes scarce. This column shows that today's events are following the historical pattern. Forex market turmoil is preceded by an inversion of the US yield curve as investors, anticipating tough times ahead, require relatively high short-term yields and an appreciation of relatively risky currencies until the disaster occurs. Then, the dollar appreciates sharply. Then, emerging markets suffer massive capital flight. What's new about the COVID-19 crisis is its scale and speed."
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