Emerging-Market Currencies Hurt by Growth Woes After Rate Hikes
- Rising bond yields fail to bring back flows into currencies
- Russia, Turkey, Indonesia, Hungary to meet on rates this week
Brazil’s real has plunged 4.2% since Sept. 22 when its policy makers raised their benchmark rate.
Photographer: Dado Galdieri/BloombergThis article is for subscribers only.
Central banks’ longstanding strategy of hiking interest rates to defend currencies is failing to work its magic in emerging markets this time.
A gauge of developing-nation currencies has sunk to the weakest level since March 2020 relative to average local-bond yields. That suggests investors are discounting the appeal of rising interest rates, fretting instead over the toxic combination of slower global growth and faster inflation.