Reserves Drop of $110 Billion Signals Emerging Currency Risk
- China leads drop in holdings with $46 billion March reduction
- Credit risk, outflows weigh on emerging market currencies
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The decade-long surge in foreign-exchange reserves among emerging markets is coming to an end, highlighting the danger posed by future currency depreciation.
China’s holdings fell by $46.1 billion in March, the most since late 2016, official data showed late Tuesday. The drawdown accounted for the largest share of the $110 billion that 11 emerging-market central banks, including those in Turkey, India, Brazil and Egypt, yanked from their reserves last month to stem currency losses.