The markets of China, Ukraine, Argentina, South Africa and Turkey are the most vulnerable among all developing countries in terms of financing needs, reserve adequacy, asset valuation, institutional quality and trade resilience, according to a review by the analysts of the Institute of International Finance (IIF). Experts in May reevaluated the potential changes in investors’ interest in the assets of these countries amidst the strengthening of the U.S. dollar exchange rate, the growth of interest rates and the intensification of trade disputes.
The IIF considers the assets of Russia, the Czech Republic, Colombia, Brazil and the Philippines less exposed to such risks.
Turkey, Argentina, the Republic of South Africa, Ukraine and India have the highest need for financing, the IIF analysts believe.
The most notable improvement compared to the previous year, including that in terms of reducing needs for funding and increasing the attractiveness of assets, was demonstrated by Indonesia. In addition, the situation has improved in Malaysia, Chile, Egypt, and Brazil.
India’s position has worsened significantly, which is largely due to an increase in the deficit of the current account of its balance of payments. A comparative increase of risks is also observed in Turkey, Poland, and Ukraine.