International Finance Association: Emerging markets "absorbed" US$28.1 billion in June

(Financial World) International Finance Association: June Emerging Markets "Sucked" US$28.1 billion

　　China News Service, Beijing, July 1st (Reporter Liu Liang) The International Finance Association (IIF) said on the 1st that although the Fed’s hawkish stance has affected emerging market capital flows, the overall situation of capital inflows is still relatively positive. In June The total portfolio of emerging markets attracting non-resident investors still reached 28.1 billion US dollars, significantly higher than the May data.

　　Since the beginning of this year, the accelerated upward growth of the U.S. economy and high inflationary pressures have put increasing pressure on the Federal Reserve to tighten monetary policy.

In the middle of last month, the Fed's meeting on interest rates released more than expected hawkish signals, which also indirectly aggravated the concerns of emerging markets about the return of the dollar.

　　However, the IIF believes that compared with the “shrinking panic” caused by the Fed’s signal to reduce asset purchases in 2013, emerging markets have already anticipated the occurrence of risks. Several central banks even before the Fed makes formal adjustments. Having normalized their policies, many countries have also issued international bonds in advance.

　　This view is also confirmed by the data.

According to IIF data, the inflow of funds from emerging markets in June was mainly supported by the bond sector, and bonds accounted for US$18.9 billion in the total funds flowing into emerging markets.

IIF said that this shows that many emerging markets have flocked to the market to issue bonds before the expected rate hike.

　　In addition, some analysts pointed out that in order to avoid the "reduction panic" from happening again, the main body of emerging Asian markets has increased the accumulation of foreign exchange reserves to prepare for negative impacts.

At present, the level of foreign exchange reserves of emerging Asian economies has reached the highest level since 2014.

This also means that compared with 2013, Asian countries have improved their resilience to risks.

　　IIF data shows that in June, the capital inflows performed best in emerging markets in Asia and Latin America, with capital inflows of US$14.4 billion and US$10.8 billion, respectively.

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