Emerging-economy bond and equity markets have rallied and then slumped this year in line with expectations about the depth and duration of the global slowdown.
“The slowdown in the US has so far had a minor impact in Asia, when many doomsayers were predicting worse,” says Nicholas Krasno, senior vice-president for Moodys Asia/Pacific bank ratings. “Recovery from 1997-98, nominal stability, hasn’t changed much. What you have now is lots of liquidity sloshing round in domestic currencies in banks which won’t lend.
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