This article will be released in full online May 20, 2023. The International Monetary Fund, part of the Bretton Woods Agreement that helped establish the…
The aftermath of the Covid-19 pandemic and the Russia-Ukraine war have put developing countries under significant stress. This column draws lessons from three generations of currency crises since the 1980s for the current period. The 1980s crisis in Latin America, 1990s crisis in Mexico, and late 1990s crisis in Asia were all characterised by significant capital inflows followed by sharp reversals in confidence, outflows of financial capital, and international assistance. These crises emphasise the importance of credible policymaking, as well as sustainable trade and budget deficits.