What does the "twin crises" in an emerging market financial crisis refer to?

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The "twin crises" in an emerging market financial crisis refer to both the currency crisis and the financial crisis. The currency crisis involves a sharp depreciation of the country's currency, while the financial crisis involves a collapse of the financial sector, resulting in a credit crunch and low levels of liquidity. Both these crises occur simultaneously and exacerbate each other in an emerging market financial crisis.

What Does the "Twin Crises" in an Emerging Market Financial