A useful way to think about this: currency carry in emerging markets is real yield — but real risk follows right behind. Desk note: High nominal interest rates in EM often reflect inflation expectations and currency depreciation risk. The yield differential compensates for a probable weakening of the local currency. Why investors care: That is why local currency EM bonds can lose in dollar terms even when nominal coupons look generous. Translate it into behavior: A bond yielding 12% in local currency that depreciates 10% against the dollar delivers roughly 2% in dollar terms — no longer an extraordinary return. Where people usually get tripped up: The mistake is treating the nominal yield spread as free return without hedging or expecting the currency adjustment. Keep this nearby on the next review: Before reacting, ask what mechanism would still matter here if the headline disappeared tomorrow. That is usually where the edge is: not in the vocabulary, but in the structure underneath it.