Mark Sobel flags currency crash risk from investor confidence loss in financial crisis

Mark Sobel flags currency crash risk from investor confidence loss in financial crisis
Investor run could trigger currency crash

A financial crisis triggered by a loss of investor confidence can lead to a balance of payments (BOP) crisis even with floating exchange rates.

Mark Sobel outlines how such a scenario may cause a run on a country's currency, pushing interest rates higher and potentially leading to a currency crash. These dynamics could intensify default fears and force fire sales of assets.

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