Institute of International Finance March 28, 2019

Global Macro Views: The EM Positioning Problem

· Robin Brooks · Tariq Khan

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About this work

Why did a more accommodative Federal Reserve fail to lift many emerging market currencies in early 2019? Jonathan Fortun, Robin Brooks and Tariq Khan suggest that accumulated investor positions after years of easy monetary policy limited the response to further easing. Excluding China, the recovery in flows appeared weak, with meaningful first quarter inflows concentrated in Indonesia and Mexico.

Abstract

Why did a more accommodative Federal Reserve fail to lift many emerging market currencies in early 2019? Jonathan Fortun, Robin Brooks and Tariq Khan suggest that accumulated investor positions after years of easy monetary policy limited the response to further easing. Excluding China, the recovery in flows appeared weak, with meaningful first quarter inflows concentrated in Indonesia and Mexico.

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Jonathan Fortun, Robin Brooks, Tariq Khan (2019). Global Macro Views: The EM Positioning Problem. Institute of International Finance.