South Africa’s commodity boost is fading, but its cyclical headwinds remain. As growth weakens and capital inflows dry up, the rand looks increasingly vulnerable to a reversal.

The precious metal bonanza has not resolved the South African economy’s plight. Nor did it improve its public debt sustainability issues. Investors should brace for a reversal in South African stocks, bonds, and the currency.

In this chartbook, we look at the balance of payments across DM and EM countries. The US does not fare well, but neither do a few other countries.

Global currency markets have entered a new era. This implies that the framework for analyzing exchange rates must also change. We introduce a new framework for analyzing EM currencies and classify them into…