The term “side victims” may not give … special importance when it speaks of wars, but in no way, they are not insignificant, and this is especially true in the case of the impact of the world war. dictatorial In the so -called emerging markets.
Most of emerging markets will retreat, according to Societe Generale strategic analysts, who warned that China’s yuan is going to retreat “average” and that South African’s radish and Latin America coins will probably stick to weak levels.
At Goldman Sachs, strategic analysts have said that the dollar expansion would probably support foreign exchange rates in other large developed countries rather than in developing economies.
The “Disaster Ball is still underway in the special indicator of developing economies (EM – FX,), to which Argentina belongs, but will slow down,” analysts, led by Phoenix Kalen at Societe Generale in London.
While the MSCI Emerging Markets Currency Index closed a five -month high, discussions with investors have shown that pessimism against assets is large, with fund managers being fortified for the trade war. The Colombian Peso and Rupeia of Indonesia have fallen more among Europe’s economies last week, Bloomberg notes.
“Even if the worst scenario is not implemented now, current uncertainty is already causing damage,” said Tamas Cser, who contributes to the management of about $ 2.8 billion in Hold Alapkezelo in Budapest, adding that “investment mood is declining worldwide.”
The shares were hit hard, with the MSCI Emerging Market Index fell 3.7% in the week. Episodes of political turmoil this year in Turkey, Indonesia and South Korea have increased investor concern about taking risks in emerging markets.
In Turkey, Morgan Stanley revised its forecasts this week to indicate a weaker pound by the end of the year and recommended that no transactions are transmitted. Turkey’s turbulence in US duties may have cost Turkey another $ 10 billion in foreign exchange reserves, adding to the losses it suffered last month in the midst of an internal political crisis.
“Foreign placement has probably been further reduced this week in response to the world -class risk -related, which means that the demand for the foreign exchange of locals will be the key factor that will determine the prospects of stocks,” analysts, including Hande Kukuk and Arnav Gu.
Some investors used the sale as an opportunity to make opportunities. Hold Alapkezelo’s CSER said he bought more Polish shares in a bet that Trump’s policies would lead to more European defense spending.
Meanwhile, Malin Rosengren, a London -based RBC Bluebay Capital Administrator, predicted that Trump’s strategies would encourage other political leaders to adopt radical tactics, increasing the possibility of more extreme fluctuations.
“There is no doubt that we will see more cases in all emerging economies, where powerful men’s policy is testing the limits of the new world of things,” Rossangren said, saying that “investors will shift to give more weight to economics and seek out more than economics.”
Anxiety for Argentina
In one of the growing economies, the Argentinean, there is anxiety over whether tomorrow, Monday, April 14, the dollar will raise a rise race.
Argentina is eagerly awaiting the effects of loose monetary controls on the financial market. For the first time for years, individuals can now buy unlimited quantities of US dollars. It is not just a coincidence that tomorrow (14.4.25) will visit Buenos Aires, USA, Scott Betset.
On Friday, April 11, 2025, the Executive Board of the International Monetary Fund (IMF) and other multilateral development banks in Washington approved new loans totaling about $ 21 billion for Argentina for this year. Subsequently, Argentinean Economy Minister Santiago Kaputo announced the relaxation of strict currency controls.
The announcement was a surprise and is an important step towards a free currency market in Argentina, according to Handelsblatt.
A dollar race, however, would be a political disaster for the government – and the IMF. If investors exchanged their pesos with dollars on a large scale, this would be a clear statement of mistrust to the Miley government and would boost the loss of the popularity of the liberal president, which continues since the beginning of the year.
Exchange checks relax with small steps
For years, the Argentines have been able to exchange dollars only in small quantities and a stable exchange rate. Companies are not allowed to transfer their profits abroad and exporters cannot freely have their currency.
Capital controls are the main reason why foreign lenders have so far invested in Argentina. They are afraid that if the exchange rates are released and the peso is underestimated, their investment will suddenly lose their value.
However, despite the step announced now, Argentinean President Javier Miley has not yet dared to completely release foreign exchange transactions. Because central bank stocks are still in Red, a crisis in the world economy with the collapse of Argentine exports could lead to a balance of payments in a few months. The country would no longer be able to import medicines or other vital products.
Relaxation of foreign exchange controls is now done in small steps: individuals can now buy US dollars. Previously, the exchange was limited to $ 200 a month. Instead of a stable exchange rate, the exchange rate will move freely in the future in accordance with supply and demand within a bandwidth that will expand by 1% each month.
The zone range now determined by the government is almost exactly the difference between the official exchange rate and the equality of the black market. When buying dollars, only $ 100 can be purchased in cash, the rest must be transferred through bank accounts. This is aimed at dealing with money laundering and avoiding the bank notes in banking branches.
In addition, companies will be able to transfer dividends to foreign shareholders for the first time since the financial year 2025. Companies, some of which have accumulated huge peso stocks over the years, who were not allowed to exchange or allow them to be transported abroad only to limited rates, will not be limited.
IMF chief Kristalina Georgieva justified the lending of the loan to Argentina with the reforms launched by President Miley. The new loan had been approved in recognition of the impressive progress made in stabilizing the economy. “It is a vote of confidence in the government’s determination to promote reforms, enhance growth and improve the quality of life of the Argentines,” Georgieva explained on the social network X.
At the same time, the fund is guaranteed with the new loan: the IMF links the loan’s commitment to the repayment of Argentine capital and interest payments, totaling $ 41 billion in the following years.
Consequently, the IMF continues to grant much of its new loans so that the Argentine government will continue to repay its loans from the 2018 and 2022 agreements.
Miley’s popularity is significantly reduced
Another bankruptcy of Argentina will also be seriously affected by the IMF: Argentina represents 28% of all IMF loans. From a historical point of view, the risk of a new bankruptcy is great: after all, this is the 23rd agreement that the Fund with Argentina has been in from 1958. The country of chronic debtors has not honored none of them.
However, no Argentinean president has implemented the fund’s requirements for a balanced budget as radically as Miley, who reduced government spending by 5% compared to economic production just a few weeks after his duties in December 20. “We did our lessons in the first year,” the Minister said when he announced the relaxation of the currency checks.
For Miley, the approval stamp and the loan of the fund come at an important moment. In March, inflation returned more than 3% for the first time in five months to 3.7%. This means that inflation is still at 56% per year. Whether the inflation rate will continue to decline is doubtful.
At the same time, his government’s popularity has decreased from over 50% to about 40% last year. In the meantime, the unions are again demonstrating for the first time with retirees.
In the Congress elections in late October, Miley, who does not yet have a majority in Congress, must win more seats in parliament and senators’ positions for his party. Otherwise, its political and economic reform program is in danger of swamping. So far, it has only implemented reforms by decrees, which should at some point be transformed into laws.