Economics
Emerging Markets Defy Contagion Concern From Turkish Lira
- Investors differentiate as fundamentals seen improving
- EM inflation near lowest since 1990, allowing rates to fall
Photographer: Kerem Uzel/Bloomberg
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Contagion? Not this time. Developing nations are defying concern that the tumbling Turkish lira and Argentine peso will infect global financial assets.
While pundits including Mark Mobius said the pain for emerging markets isn’t over and Paul Krugman said the current wobble had the whiff of a crisis to it, markets have been far more sanguine. On Thursday, 16 of 24 emerging-market currencies gained as the lira plunged more than 4 percent even after Turkey’s emergency interest-rate hike. Meanwhile, Argentina’s peso extended a two-day slide.