Experts: Hike of Fed's key interest rate will shrink currencies in emerging countries

Baku. 10 November. REPORT.AZ/ Investors who assessed the continuation of positive trend on global financial markets as an opportunity started to pull their assets from markets of emerging countries.

Analytical Group of Report News Agency believes that expected hike of Fed's key interest rate for the fourth time in December and 2018 accelerated the investors leaving from the assets of emerging countries.

In last five days Turkish lira lost its value by 7%, Mexican peso, Brazilian real, Columbian peso and South African rand by 3%. Despite that oil price is nearing 65 dollars per barrel Russian ruble fell by 1,6%.

Just yesterday “iShares MSCI Turkey ETF” exchange traded funds in New York sold at $ 8,2 mln.

Director in the FX and Local Markets Strategy Team at Citibank in London, Luis Costa said the currencies of emerging countries are not stable. At a time when there is a high interest to financial assets, it is not understandable.”

Co-founder of the Eurizon SLJ Capital investment company Stephen Jen said “despite that crude oil prices are rising and the currencies of emerging countries are vulnerable to increase of Fed’s interest rate. As interest rates increase the currencies of those countries will fall as dominoes tiles.”

BNP Paribas bank said in its report that decrease of liquidity on global market will negatively impact on currencies of emerging countries.