Borrowing in a host country currency to do projects in that area can be a prudent way to mitigate exchange risk
However, some emerging markets countries are reliant on outside finance, and have high short-term refinancing requirements
“Focus on these markets is underpinned by the fear of a ‘sudden stop’, where capital flows halt or even reverse.
If this happens, the impact on indebted corporations can be devastating, with knock on effects for banks.” (FT, 15 January 2014)