10 years of financial crisis: Ghost of Lehman haunts emerging markets again

The third part of the multi-part series on the 10th anniversary of the fall of Lehman Brothers looks at the impact on markets globally and in India

The   flood of liquidity that supported the global financial system after the fall of Lehman Brothers has turned into a pain-point for emerging markets (EMs) 10 years later.

Tightening liquidity conditions in developed markets (DMs) has raised the spectre of EM outflows, contributing to a rout which has seen the Turkish lira and the Argentine peso fall over 40 per cent and the Indian rupee hit a record low by going past the 72-mark against the dollar.

“We believe that the collapse in EM asset prices is driven by uncertainty regarding US monetary policy (a hawkish Fed), trade policy (tariffs