Investors are moving to safe-haven assets, affecting emerging markets
The decline of currencies and stocks in emerging markets has reached record levels amid a surge in oil prices and the outflow of investors into safe-haven assets.
As of Friday, March 6, emerging markets are experiencing a significant downturn, reports Bloomberg. The MSCI EM currency index dropped by 1.4%, while the stock index fell by more than 6%. The main reasons for this sell-off are related to the surge in oil prices, prompting investors to shift to safer assets like the US dollar.
In this context, countries that are net oil importers, especially in Asia, have been hit hard due to the threat of rising domestic inflation. Notably, the South Korean won experienced its biggest one-day drop since 2009. The market also faces risks of forced deleveraging and position liquidation.
Experts warn that this trend may continue if the situation in oil markets does not stabilize. This creates potential challenges for the economies of emerging market countries, which may face serious financial difficulties.
| Indexes | Change (%) |
|---|---|
| MSCI EM (currencies) | -1.4 |
| MSCI EM (stocks) | -6.0 |
