The international financial news agency recently published a brief outlook on the issues to watch in emerging markets. 

The first point—a positive one—is that concerns about the financial health of emerging economies have eased, with most currencies showing a clear appreciation against the U.S. dollar so far this year. The two—and very significant—exceptions are Russia and Turkey, which have turned to the market to sell international assets to prop up their currencies.

In the case of Russia, it has entered the market with its yuan reserves to offset the discount at which it is selling its oil, while in Turkey, the Central Bank’s intervention is estimated at about US$108,000 million in its effort to offset the effects of an excessively loose monetary policy.

But while financial concerns have eased, problems have arisen in the areas of politics and corporate governance. Bloomberg notes that the protests in Peru will cost the country 2 percentage points of GDP this year, while in Brazil, investors are concerned about President Luiz Inácio Lula da Silva’s statements against the independence of the Central Bank, in connection with the interest rate hike.

Finally, there are the risks of poor corporate governance. Recent events involving the Adani Group in India have raised doubts on this issue among companies in that country, which are undergoing a significant process of growth and internationalization, although Bloomberg notes that its analysis suggests the Adani case is an anomaly among corporations in that Asian country. Closer to home, accounting irregularities at Americanas, a major Brazilian retail chain, have added yet another cause for concern regarding corporate debt.

Inflation Expectations in Brazil