A useful way to think about this: currency carry in emerging markets is real yield — but real risk follows right behind. What is happening: 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. That is why local currency EM bonds can lose in dollar terms even when nominal coupons look generous. In practice: A bond yielding 12% in local currency that depreciates 10% against the dollar delivers roughly 2% in dollar terms — no longer an extraordinary return. Watch for: The mistake is treating the nominal yield spread as free return without hedging or expecting the currency adjustment. Useful lens: Before reacting, ask what mechanism would still matter here if the headline disappeared tomorrow. A lot of confusion disappears once you separate the headline from the mechanism.