Investors in emerging markets are in attempt to measure whether the currency crisis and the increase in interest rates used to tackle the crisis could turn into a much bigger crisis and even recession.
The Turkish central bank on Thursday, tried to draw a line under the collapse of its currency, the lira. The lira has had a 40 percent collapse this year through increasing interest rates by more than 6 percentage points to 24%.
According to Money Web Argentina is struggling to grow its peso which has halved un value despite punitive interest rate rises to 60%.
Other currencies have been caught in the slipstream, which India’s rupee plumbing record lows and South Africa’s rand, Russia’s rouble and Brazil’s real losing 15-20% this year so far, says Money Web.
Signs of a market turmoil are already showing on economies. South Africa fell into a recession in the second quarter of the year. Argentina is also expected to fall into recession.
Source: Money Web