Emerging-market currencies reach one-month high led by rupee

what happened

Reuters reports that MSCI’s emerging-market currency index rose to a one-month high on Monday. The biggest moves came from India’s rupee and South Korea’s won: the benchmark gained 0.3%, while the won advanced 0.6% to its strongest level since early October 2024. Brent crude and developed-market bond yields eased but remained elevated.

India’s central bank introduced measures designed to reduce spot and forward dollar demand. The rupee jumped 1% to 95 per dollar, although analysts said depreciation could resume because of underlying macroeconomic pressures. Investors were also assessing the US announcement of an energy ceasefire between Russia and Ukraine.

Corporate earnings and the IMF and World Bank meetings in Bangkok are now in focus. IMF Managing Director Kristalina Georgieva urged countries to move quickly to curb inflation and large deficits. Investors are also examining concentration risk in the artificial-intelligence trade across Korean and Taiwanese companies. MSCI’s equities index fell 0.6%, Kyiv’s international bonds declined by about 0.6 cents on the dollar, and Russia’s rouble strengthened 1.3%.

why it matters

For markets, the report highlights the competing effects of currency-support measures in India, still-high commodity and bond-yield levels, corporate results and IMF policy discussions. Developments involving Russia and Ukraine, Houthi attacks on Riyadh international airport and central-bank decisions may add to volatility. Turkish equities fell 0.7% and Poland’s zloty lost 0.2%; central banker Henryk Wnorowski said a November rate increase was “certainly being considered”.

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