waltermasoni
Caribbean Trader
Announcement:
Moody's: Renewed financial market correction highlights vulnerability of some emerging and frontier markets
24 Aug 2018
Singapore, August 24, 2018 -- Moody's Investors Service says the fallout from the correction in Turkey's (Ba3 negative) exchange rate and asset prices highlights again the external vulnerability and sensitivity to a rise in the cost of debt of some emerging and frontier market nations.
Those economies most sharply hit by weakening exchange rates, wider risk premia and lower capital inflows so far this year share the characteristic of twin current account and budget deficits, while country-specific factors -- often relating to policy credibility -- have likely also fueled the financial market sell-off.
Moody's conclusions are contained in its just-released report, "Sovereigns - Global Contagion risks greatest where external vulnerability, weak debt affordability meet low policy credibility".
The report examines the countries that have been worst hit by a tightening in financing conditions this year. It draws on Moody's previous analyses of where -- aside from Turkey -- vulnerability to a sharp and sustained deterioration in financing conditions is greatest.
In this context, Argentina (B2 stable), Russia (Ba1 positive), Brazil (Ba2 stable) and South Africa (Baa3 stable) have seen their currencies depreciate the most against the dollar year to date, while Zambia (Caa1 stable), Argentina, Ecuador (B3 stable), Gabon (Caa1 stable) and Senegal (Ba3 stable) have experienced the sharpest rise in risk premia as measured by bond yield spreads.
Moody's: Renewed financial market correction highlights vulnerability of some emerging and frontier markets
24 Aug 2018
Singapore, August 24, 2018 -- Moody's Investors Service says the fallout from the correction in Turkey's (Ba3 negative) exchange rate and asset prices highlights again the external vulnerability and sensitivity to a rise in the cost of debt of some emerging and frontier market nations.
Those economies most sharply hit by weakening exchange rates, wider risk premia and lower capital inflows so far this year share the characteristic of twin current account and budget deficits, while country-specific factors -- often relating to policy credibility -- have likely also fueled the financial market sell-off.
Moody's conclusions are contained in its just-released report, "Sovereigns - Global Contagion risks greatest where external vulnerability, weak debt affordability meet low policy credibility".
The report examines the countries that have been worst hit by a tightening in financing conditions this year. It draws on Moody's previous analyses of where -- aside from Turkey -- vulnerability to a sharp and sustained deterioration in financing conditions is greatest.
In this context, Argentina (B2 stable), Russia (Ba1 positive), Brazil (Ba2 stable) and South Africa (Baa3 stable) have seen their currencies depreciate the most against the dollar year to date, while Zambia (Caa1 stable), Argentina, Ecuador (B3 stable), Gabon (Caa1 stable) and Senegal (Ba3 stable) have experienced the sharpest rise in risk premia as measured by bond yield spreads.
