Take a taxi in São Paulo nowadays and you will experience the maddening traffic and untidy streets of an emerging-country metropolis. But when the time comes to pay for the ride, you may feel like you are in Boston, Luxemburg, or Zurich: the value of the Brazilian real, like the currencies of many emerging-market countries, is high - and could go higher.
Strong currencies make strong countries, a U.S. policymaker used to say. Emerging-country exporters struggling to retain customers in the wobbly U.S. and European markets feel otherwise.
For decades, developing countries dreamed of a nirvana of sky-high commodity prices and rock-bottom interest rates. Perhaps finance ministers in Lima, Bogota or Jakarta should have been more careful about what they wished for. The problem? An invasion of short-term capital flows fleeing the slow-growth, low-interest-rate advanced countries.