Capital Market Opinion (Ceased)
2013 Sep/11
Financial Unrest in Emerging Markets and Korea’s Economy
September 11, 2013
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- Summary
- Recently, some emerging economies experienced large capital outflows and currency depreciation because of expectations that the Federal Reserve will reduce its quantitative easing program. In this article, I compare Korea’s current economic condition with the past two crises as well as other emerging markets currently facing financial unrest. Korea has significantly improved its foreign reserves condition and maintained current account surpluses unlike other emerging economies. But as the financial unrest in emerging markets is forecasted to linger for some time, Korea should be on full alert to brace for the possibility of foreign capital outflows.