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recently i read somewhere that an emerging economy was vulnerable because it was running low real rates that failed to contain domestic demand pressures. can someone explain what is meant by this? i infer it is alluding to external imbalances - e.g. domestic demand leads to higher imports and a worsening current account which risks not being 'financed' by capital inflows because of the too low real rates - but i would like to flesh this out more and understand it better

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