Emerging market currencies performed at their worst monthly performance in a year in March.

According to an index of 20 currencies calculated by MUFG, emerging currencies fell by 1.9% in March and by 3.7% since the start of the year. The worst performance since March 2020.
For Lee Hardman, a currency analyst at MUFG, the difficult start to the year continues. “Our index has now cancelled out the gains recorded since the American election,” he continues.
The Turkish lira had the worst performance (-11%). However, depreciation has been widely shared among emerging currencies and has accelerated in recent weeks.
For Lee Hardman, with the sharp rise in US long-term rates and the rebound of the dollar, the environment is becoming more complicated. The situation in emerging markets is also weakened by the start of outflows of foreign capital.
“The correction in the interest rate markets has gone hand in hand with significant capital outflows from emerging markets,” notes the IIF. In March, these outflows reached 4.8 billion dollars, the largest amount since last September