Higher Rates Set to Protect Emerging Market Currencies From Fed Taper: Reuters Poll

Higher Rates Set to Protect Emerging Market Currencies From Fed Taper: Reuters Poll
Thai baht notes are seen at a Kasikornbank in Bangkok, Thailand, on May 12, 2016. Athit Perawongmetha/Reuters
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JOHANNESBURG/BENGALURU—The shift in global inflation expectations from transitory to sticky will spare emerging market currencies a sell-off in the next few months as central banks consider or deliver near-term interest rate hikes, a Reuters poll of strategists found.

While several remain under intense pressure, many emerging market currencies are likely to mark a stronger final quarter of 2021—as they have in previous years—especially the South African rand, Russian rouble, and Thai baht.