Possibility of emerging market financial instability is low: Bank of Korea
- 6 years ago
As the United States continues to tighten its monetary policy and its ten-year yields hit a seven-year high, there are concerns about financial instability in some emerging markets.
However, a study released by the Bank of Korea shows the possibility of a currency crisis spreading in emerging markets is low.
Countries with relatively high foreign debt like Turkey and Argentina showed signs of a currency crisis, but the BOK says unlike the taper tantrum seen in 2013, the drop in stocks and the number of countries affected by the jitters was limited.
The study say South Korea's capital markets remain stable, supported by a healthy current account surplus and ample foreign reserves,... but added the ongoing U.S.-China trade spat remains a downside risk .
However, a study released by the Bank of Korea shows the possibility of a currency crisis spreading in emerging markets is low.
Countries with relatively high foreign debt like Turkey and Argentina showed signs of a currency crisis, but the BOK says unlike the taper tantrum seen in 2013, the drop in stocks and the number of countries affected by the jitters was limited.
The study say South Korea's capital markets remain stable, supported by a healthy current account surplus and ample foreign reserves,... but added the ongoing U.S.-China trade spat remains a downside risk .