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Emerging markets and Russian ruble recoup losses for 2018
Emerging markets and Russian ruble recoup losses for 2018

Experts’ tips on buying currencies of developing countries turned to be really useful. Last autumn, some major investment banks recommended their clients to buy these currencies, arguing that they will be able to recoup losses in 2019. So, it actually happened. The South African rand has already managed to add 3.8%, the Brazilian Real appreciated by 3.1%, the Turkish lira rose by 3%, while the Russian ruble is the best performer with an increase of 4.8% year-on-date. Last November, when global markets mired in a state of chaos, few investors paid attention to such volatile assets. However, some big speculators seized the opportunity to buy the currencies of emerging markets in anticipation of hefty profits. They planned to play carry trade and get the most out of differences in exchange rates.

Nowadays, these currencies are still sought after. According to price charts, their quotes are steadily rising. Interestingly, the Russian ruble is advancing faster than others thanks to the peak of the tax period in the country. Exporters, which are obliged to pay taxes in Russian rubles, are buying the national currency massively. These payments also include mineral extraction taxes which amount to 500 billion rubles. So, this factor boosted the demand for the Russian currency. Such trading activity looks too aggressive at the moment, though it is usually high at the start of the year. As a rule, in January the liquidity is low as most market participants do not get back to work by that time. 

Published: 2019-02-04 12:37:09 UTC
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