Current Account:
▪️ Few EM countries, led by #SouthAfrica & #India, have flipped to Current Account Surplus largely owing to import compression during COVID growth slowdown
▪️ South Africa feeling less vulnerable while India seems worried about potential capital outflows
1/3
▪️ Few EM countries, led by #SouthAfrica & #India, have flipped to Current Account Surplus largely owing to import compression during COVID growth slowdown
▪️ South Africa feeling less vulnerable while India seems worried about potential capital outflows
1/3
South Africa Central Bank confident; can weather taper tantrum
🔹 Strong Trade balance - additional boost to exports from surge in commodity prices (Platinum, Gold, Iron Ore)
🔹 Lower than expected fiscal deficit
2/3
ft.com/content/872790…
🔹 Strong Trade balance - additional boost to exports from surge in commodity prices (Platinum, Gold, Iron Ore)
🔹 Lower than expected fiscal deficit
2/3
ft.com/content/872790…
▪️ India reluctant to raise rates but significant FX Reserve build up
▪️ In any case, INR more of an Equity ccy than a Bond ccy => raising rates may not attract as much inflows (unlike other high yielders) but may hurt asset valuations leading to outflows
▪️ In any case, INR more of an Equity ccy than a Bond ccy => raising rates may not attract as much inflows (unlike other high yielders) but may hurt asset valuations leading to outflows
https://twitter.com/VaradMarkets/status/1408009666232160258?s=20
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