2014: the year the fragile five fall… then rise? | beyondbrics:
"Those worried about an EM sell-off will be cheered by Société Générale’s outlook for the coming year.
The bank reckons the currencies of the so-called fragile five EMs – Brazil, India, Indonesia, Turkey and South Africa – could drop from now until March, when the Fed is expected to start tapering. But not to worry: they should appreciate in the following three quarters as the Fed pursues a dovish policy.
First, for the avoidance of doubt, a few words about the fragile five. This group does not contain the countries with the largest trade deficits or the fewest foreign exchange reserves. Chile’s current account deficit is expected to be bigger than Brazil’s and Indonesia’s in 2013. Brazil’s central bank has a relatively large pile of forex reserves, compared with Mexico and Poland."
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