This scenario would imply a lower external stimulus to our economy and increased volatility in international financial markets in the short term, but at the same time it contained some positive elements such as recovering growth in developed economies and more normal international interest rates, which would help achieve a more sustainable global economy in the medium term. In recent months, the world has continued to advance towards a more balanced situation, but it has also unveiled some of the risks we pointed out last July. Some countries have been more volatile in this transition, as reflected in strong devaluations of their currencies, higher interest rates, downward adjustments in growth expectations and capital outflows (figure 1). The list includes some of the biggest emerging economies like Brazil, India, Indonesia, Turkey and South Africa. This reflects a combination of a lower monetary stimulus expected in the U.S. with the vulnerabilities that were created in previous years in some emerging economies. The latter include greater reliance on external funding, currency mismatches, fiscal imbalances, rapid growth in domestic credit and relatively high inflation rates. These shortcomings mean less room to maneuver economic policies to compensate for the deterioration in the external scenario. Several economies that had intervened very actively to prevent exchange rate appreciations have begun to act now to curb the depreciation of their currencies. Brazil, for example, announced an intervention amounting to 60 billion dollars by the end of the year, while India has introduced capital controls to grapple with the sharp fall in the rupee.

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