Last May, emerging markets “went into freefall” when the US central bank hinted that it would taper (gradually reduce) its money-printing programme, says Chris Wright on Forbes.com. The prospect of higher interest rates in the US prompted investors to turn their backs on traditionally risky assets.
Once tapering was finally announced late last year, emerging markets took it in their stride. But this smooth start hardly rules out “a disorderly adjustment scenario” akin to, or worse than, last May’s turmoil, says the World Bank.
If there is such a panic, the amount of money flowing into developing [...]
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