Five reasons central bank actions no longer impact EMs like they used to

Proposed changes to monetary policy

Four years ago, hawkish noises from the US Federal Reserve caused the infamous 'taper tantrum' across the world. Emerging market assets became a casualty of this and the sector fell out of favour with investors as a result.

The ‘tantrum' reduced the attractiveness of emerging market debt and also shone a light on the challenges that some emerging markets could face when trying to finance their current account deficits in a strong-dollar and higher US yields environment. Today, with signals from North American and European central banks that monetary policy is likely to tighten, should emerging market investors be bracing themselves for a similar hurricane? M&G's Calich: Higher US rate environment less challenging for some EMs than a few years ago In 2013, emerging market economies were much more close...