Emerging market currencies posted their worst monthly performance in a year in March.

According to a 20-currency index calculated by MUFG, emerging currencies fell 1.9% in March and 3.7% year-to-date. Worst performance since March 2020.
For Lee Hardman, currency analyst at MUFG, the difficult start to the year continues. " Our index has now reversed the gains made since the US election," he said
The Turkish lira posted the worst performance (-11%). However, the depreciation was widely shared among emerging currencies and has accelerated in recent weeks.
For Lee Hardman, with the sharp rise in US long rates and the rebound of the dollar, the environment is becoming more complicated. The situation in emerging markets is also weakened by the beginning of foreign capital outflows.
" The correction in interest rate markets has gone hand in hand with large capital outflows from emerging markets ," notes the IIF. In March, these outflows reached $4.8 billion, the largest amount since last September.