Volatlity In Emerging Markets
In 2008 and 2009, analysts were expecting emerging markets to become a safe haven for investors, considering the recession in the US and Europe post the global financial crisis. But as of 2013, while developed economies seemed to be strengthening, the emerging markets had underperformed in the previous couple of years. Analysts were also concerned about the vulnerability of the emerging markets which reacted strongly to modest changes in the world economy. In mid-2013, many emerging markets were struggling with rapid depreciation of their currencies. Countries such as Brazil, India, South Africa, and Indonesia were among the worst affected. Between May and September of 2013, while the Indian Rupee fell by 21%, the Brazilian Real fell by 17%, followed by the Indonesian Rupiah (15%), the Thailand Baht (8%), and the Russian Ruble (6%). Central banks in key markets like Brazil and India were working frantically to prop up their currencies.