Emerging markets continue to hold the key

摘要

The new year began with positive news from some of the major developed economies which appeared, finally, to be recovering after some five years spent either stagnating or in continuing recession. However, economists also warned that after several years of strong growth, risks in emerging markets were becoming increasingly prevalent. This was highlighted at the turn of the year by the run on the Argentine peso and the frailty of the Turkish lira, which led Ankara to raise interest rates in a bid to stabilise the currency. The weakness in both currencies is understood to have been triggered by the US Federal Reserve's decision to tighten its asset purchasing programme, which had hitherto offered the governments of emerging nations access to easy credit, and by the continuing ramifications of the US Government shut-down earlier in 2013. Although this political brinkmanship appeared to have little immediate effect on business in the USA, it clearly alarmed investors and money men.