Emerging market currencies grow on dollar weakness

Against the backdrop of a weakening dollar, some emerging market currencies are strengthening. This was indicated by the increase in the MSCI index by 0.1% on February 2. The currencies of oil-producing countries rose as oil prices approached their seven-year highs last week. For example, growth on Wednesday showed the Mexican peso. Oil prices are rising due to increased demand, which lags behind supply. At the same time, against the background of further growth of Turkish inflation, which in the first month of this year, according to forecasts, reached a record level for twenty years, the national currency of the country fell by 0.5%. The lira has lost 0.9% since the beginning of January. Recall that in 2021, the lira lost 44%. On Wednesday, the South African Rand showed a decrease of 0.1%, its rate against the dollar was 15.28. The Polish Zloty gained 0.6% against the euro. On Wednesday, an increase of 0.3% showed in an index of shares of emerging markets, as investors’ attention focuses on the results of meetings of the GB Central Bank and the European Central Bank, which may indicate the timing of their monetary tightening.

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Arseny Kudrin

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