Thus, the vulnerability of Asia, other than Korea and India, is relatively contained to that extent. It is in this context the foreign exchange markets in India and Korea have experienced greater pressure in recent times. Despite the fact that no significant macroeconomic disruption has taken place in EMEs, some vulnerabilities exist.
There are indications that the current crisis will have some implications in terms of higher funding costs and raising external finance, particularly, for lower rated firms. Further, countries with significant foreign bank presence, mostly in East European economies, might be vulnerable to financial stress faced by a parent bank. Similarly, slowdown in advanced countries might impact the remittances to EMEs.