During the same period, the JP Morgan Emerging Markets Currency Index declined 17 percent, a significantly smaller drop than the 29 percent decline between mid-2014 and early 2017. This round of currency depreciation in emerging economies is relatively small, and there are three main reasons. First, the foreign exchange reserves of emerging economies have continued to grow, offering a thicker buffer against capital outflows.
Second, many central banks of emerging economies have won the initiative by starting their interest rate hiking cycles ahead of the Fed. Third, commodity-exporting emerging economies have been lifted by the rising global commodity prices.