A common side effect of diabetes is peripheral neuropathy. In the feet, peripheral neuropathy affects sensory nerves causing tingling and numbness, autonomic nerves causing increased dryness of the skin or increased sweating, and also motor nerves that affect the muscles. The effect on muscles can cause weakness and problems with proprioception, or monitoring where your body is in space. This in effect causes imbalance, and this is why some diabetic patients feel that their diabetes progression has also affected their balance.
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