Many countries have accumulated ample foreign reserves and have reduced their external debt burdens significantly. Commodity exporters, in particular exporters of oil and precious metals have seen their international reserves rising to record levels. The picture is less comforting for commodity importers, as they are faced with a negative terms-of-trade shock as energy and food prices surged. Especially for countries running large current account deficits financed by short-term portfolio flows there is a risk of rapid draw-downs in international reserves.
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