Macri or Cristina, the risk of monetary crisis is very high

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"While the Ukrainian hryvna has escaped the wrath of the market in 2018, it also carries a significant risk, with a score close to the read in difficulty," the report adds. The South African rand is another targeted target: "The uncompetitive and rigidly structured economy that the government has not yet taken into account reinforces its double chronic deficit, making the rand the second most important emerging currency. risky in our ranking "On the other hand, in the case of the Colombian peso, which often appears as the next victim of a mbadive sale, the consultant believes that" this fear is exaggerated and is probably based on a reading the country's macroeconomic fundamentals ". At the other extreme, Asian and European currencies should be the most resilient to a change in risk appetite because of the strong external balances of these countries and the contained inflationary pressures.

"While China's data suggest that the worst is over, the growing uncertainty about US growth and global trade tensions continue to weigh on global market sentiment and it is likely Emerging market currencies will be more volatile. "According to the consultant, despite a relatively unfavorable global environment, investor sentiment remains fragile, which explains the currency crisis in emerging markets. And "although the timing of these crises is difficult to predict, the relative performance of currencies in the event of mbad selling is not", for which they have designed a predictive model covering 166 countries. What is clear is that by observing changes in risk profiles, monetary and / or fiscal policies are the main drivers of positive or negative change in all currencies. In some cases, the deterioration is due to inflation and higher interest rates, the report says.

Next, the most relevant of the Argentine and Turkish cases.

In our rankings, Argentina scores 8.2 out of 10 and Turkey 7.6, which equates to a 70% probability of a currency crisis over the next three years. Both continue to experience past policy mistakes and new mistakes that prevent corrections from being more effective.

The high rate hikes in Argentina temporarily stabilized the situation, but also slowed down economic activity. And as the unconventional methods of BCRA (such as maintaining the monetary base) to curb inflation are failing, the latest peso defense measures through interventions exchange rates and price controls are likely to pave the way for a new conventional currency crisis. Turkey and Argentina show that once the balance of payments crisis has broken down, there is no longer a "good" option to repair the economy. This is especially true if a country is trying to both achieve mutually inconsistent objectives, such as stabilizing the exchange rate, supporting growth, reducing inflation and reducing the costs of doing so. Borrowing, even with considerable international badistance, as in the present case. Argentine. If the "bitter pill" is not deducted from adjustment, more painful financial crises and potentially double or triple the future damage of sovereign debt and / or bank may occur.

The Ukrainian hryvnia is followed by the risk semaphore with a score of 6.7 or 47% probability of crisis in 3 years; then the South African rand with a score of 5.1 / 10 in our tool, which indicates an approximate probability of 40% of currency crisis over the next three years.