Published Aug 30, 2018 04:00PM ET
Emerging Markets Tumble as Argentina Struggles to Stop Bleeding
(Bloomberg) -- A selloff in emerging markets deepened as Argentina and Turkey struggled to shore up global investor confidence.
The peso tumbled to a record low, prompting Argentine policy makers to boost rates to 60 percent. In Turkey, a report that the central bank’s deputy governor was set to resign sank the lira. South Africa’s rand volatility soared amid a controversial land reform debate. An expanded foreign-exchange intervention in Brazil brought some relief to both the real and its peers. A little later currencies extended losses as President Donald Trump was said to move ahead with a plan to impose new tariffs on China as soon as next week.
Emerging markets got pummeled again amid concern that Argentina and Turkey’s struggles to restore investor confidence will pressure their economies further -- while embroiling the rest of the developing world. That comes at a really bad time when considering the other challenges that investors face -- the end of an era of cheap money, prospects of a global trade war, American sanctions and deep political uncertainties in places such as Brazil.
“These currencies are infecting emerging markets,” said Shamaila Khan, director of emerging-market debt at AllianceBernstein in New York, referring to the Turkish lira and the Argentine peso. “There will be volatility around headlines and today is one of the negative days.”
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Written By: Bloomberg
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