In their first reaction to the massive rise in interest rates by the US Federal Reserve, most emerging markets fell today, led by Asian stocks.
The impact of rising interest rates on emerging economies is in rise as the MSCI emerging markets equity index is heading for the worst performance weekly since last March, in drop of more than 1%.
The impact on emerging market currencies is also in rise, as they are struggling to maintain gains against the dollar, which is increasing in value with a rise in US interest rates.
On Wednesday, the US central bank announced its largest interest rate hike since 1994, while raising its key borrowing rate by 0.75% to counter rising inflation.
With this third increase questyear, US interest rates are now between 1.5% and 1.75%.
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