Page 9 - RusRPTJan21

That is a turnabout as IIF capital tracker recorded historically large outflows from EM earlier this year when a perfect storm of trade wars, oil price collapse and a pandemic combined to create one of the worst crises in living memory. During the recovery that followed the inflows were “tepid” according to IIF.
But now the momentum is building as investors adjust to the new and dramatically improved circumstances. As ​bne IntelliNews​ featured in its cover story this month “​Brighter days ahead​” sentiment has improved dramatically following the news that there are at least four viable vaccines that will be shortly available. But in addition long-term changes in global capital flows following the election of Joe Biden as US president suggest that the dollar will start weakening and that is also always good for EMs. In the short-term IIF predict that the inflows in the fourth quarter of this year will continue to be substantial as well.
“The fourth quarter of 2020 is likely to be the strongest quarter for EM inflows since the first quarter of 2013, i.e. since just before the “taper tantrum”,” IIF said. “Excluding China, non- resident portfolio flows to EM are at their strongest pace since the second quarter of 2014, i.e. since just prior to the fall in commodity prices that pulled down the terms of trade in many emerging markets, causing their currencies to depreciate.”
9 ​RUSSIA Country Report​ January 2021 ​ ​www.intellinews.com