First Argentina. Then Turkey. Could Brazil be next?
Mohamed El-Erian hinted at exactly that as the Brazilian real led major currency losses Wednesday, even after the nation’s central bank offered $1.5 billion in extra swap contracts to keep it above water.
The central bank’s intervention followed similar actions by central bankers in Argentina, Turkey, India and Indonesia. While India and Indonesia have curbed some of their losses, currencies in Argentina, Turkey and now Brazil remain in precarious positions with world-leading selloffs this year.
"Higher oil prices + rising interest rates + appreciating dollar, the trifecta that continues in #markets today (albeit not in an extreme fashion), tends to test the ‘self insurance’ of several #EMergingMarkets, together with their economic policy responsiveness," he said....
- ^ Link (twitter.com)
- ^ El-Erian’s ‘Trifecta’ Tweet Warns Away Emerging-Markets Bulls (www.bloomberg.com)