Yesterday on Bloomberg Douglas E. Cote of ING US Investment Management stated emerging markets will change. In fact, we may be in the middle of a second Asian currency crisis as indeed Thailand has many more reserves compared to the first currency crisis during 1997/1998, but they still may not be enough to stave off the crisis. The percentage impact of these reserves in relation to the economic growth of emerging markets may not have kept pace in proper ratio.
The players in the current crisis may be different from 1997, but the Asia market impact is still the same. CIIT (China, India, Indonesia, Thailand) currency markets seem to be taking the brunt of the difficulty from any US Federal Reserve tapering but will this spread to other currencies in other emerging markets, and will first world economies follow? India's currency restrictions on the Rupee are certainly not helping the current situation.
Are these emerging markets the first wave of a short term impact, and will other markets follow? If Australia is nothing more than a proxy from China, is that a logical expectation?
Douglas certainly gives the FX observer in Asia. There is much lot to consider in this excellent Bloomberg interview.
Click here for the full interview, as it is certainly worth a 4 minute look.
For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.
Tokyo Tokyo
Mark Pink Shinichi Nagasawa
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