Fitch's Inside Credit: Drop in EM FX Reserves Likely to Remain Widespread
29 May 2015 - 11:41PM
Business Wire
The latest edition of Fitch Ratings' Inside Credit newsletter
features the fourth installment of our Global Perspectives series,
focusing on falling emerging market FX reserves. Partial data for
April suggests the steep decline in emerging market reserves is
continuing, and remains widespread.
After reaching an all-time high of USD8.17 trillion in June
2014, emerging market official foreign exchange reserves hit have
been falling steadily by an average of USD58 billion a month ever
since. While most of this has been due to reductions in China and
Russia, declines have occurred elsewhere. Total reserves have also
been falling year on year from December 2014, with the cumulative
yearly decline accelerating to USD385 billion in March 2015.
"There are few reasons to expect an imminent change to recent
trends in China and Russia. Other EMs are still facing weak
commodity prices - although with some stabilization in recent
months - and the prospect of further adjustments in global capital
flows when the U.S. eventually tightens monetary policy," says
James McCormack, Global Head of Sovereigns.
Other topics covered in this week's edition of Inside Credit
include:
- Record EMEA Corp Issuance Boosted by U.S. and HY Issuers
- U.S. Leveraged Loan Default Rate at New Low One Year
Post-EFH
- Japan Megabanks' Overseas Operations Are Rising in
Importance
- China Asset Securitization Potentially Positive for Banks
- Brazil's Budget Freeze Highlights Effort and Challenges
- Italian 'Bad Bank' Push Seems Credit Positive for Sector
- Why Is Tech Changing the Fan Experience?
- Register for Fitch's Global Banking Conference
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Fitch RatingsMedia Relations:Alyssa Castelli, New York, +1
212-908-0540Email: alyssa.castelli@fitchratings.com