Will Emerging Markets Falter Amid Investor Concerns?
Investors are beginning to reassess their evaluations about various emerging markets as the global economic climate starts to solidify, Bloomberg reports.
Many leaders of emerging countries celebrated the U.S. Federal Reserve’s decision to delay the tapering of quantitative easing at the Federal Open Market Committee’s September 17-18 meeting. As long as quantitative easing is in place, dollars are relatively cheap, making investment in developing nations an attractive option.
However, even the fear associated with the end of the Fed’s expansionary monetary policy meant that investors started to withdraw money from emerging markets. This, is turn, sent currency values plummeting; the Indonesian and Indian currencies have both sank by more than 10 percent since the start of this summer.
Amid worries that a crisis could be triggered in the values of such currencies, developing nations have been forced to take steps to ensure that the value of their monetary units remains steady in the coming months.