Following a period of turbulence and volatility in late 2018, international financial markets have displayed a more orderly behavior since the turn of this year. This has been particularly beneficial for EMEs.
Per some estimates, portfolio capital flows to these countries increased more than three-fold between the last quarter of 2018 and the first quarter of 2019, a development that has been accompanied by an appreciation of these countries’ currencies, declines in domestic interest rates and, in general, easier financial conditions.