Hot Money Wanders &Nbsp; Emerging Market Currencies Suddenly Depreciate.

And emerging market currencies in the second half of last year. Rapid depreciation In sharp contrast, some emerging market currencies, including Brazil's real, South Korea's won, Thailand baht, have begun to rise sharply, which has attracted a great deal of attention from the market. The reason is that loose monetary policies in Europe and the United States lead to the influx of hot money into emerging market countries.

Eye-catching Asian currencies

Europe Central Bank In the two successive launch of the long-term refinancing scheme (LTRO), more than 1 trillion euros have been injected into the financial system, and the Federal Reserve has also continued to ease monetary policy to stimulate speculative hot money into emerging markets. Among them, the performance of Asian currencies is particularly eye-catching. Market data show that since the Federal Reserve said it would maintain ultra-low interest rate policy, by the year 2014, 13 billion US dollars of global funds had entered the stock market of India, Korea, Thailand and Indonesia, and the Asian Currency began to show its strongest start since 2006. In February alone, the Thai baht appreciated 2.2% against the US dollar and Malaysia's ringgit also appreciated 1.6%.

A survey released by Reuters shows that investors have regained their optimistic views on most Asian currencies in the past two weeks, and nearly two times the investment positions for ringgit and baht.

Exporters complain

The appreciation of the local currency is undoubtedly a severe test for exporters. Owen Sung, spokesman for the largest chemical manufacturer in Korea, said that the appreciation of the won would hurt exporters' profitability. If the Korean won appreciated faster and approached the tolerable level, the ROK should intervene.

Brazil declared war on hot money again last week, severely criticized the quantitative easing policy in Europe and America. Brazil announced the expansion of foreign borrowing tax, threatening to further implement capital regulation to protect troubled domestic manufacturing enterprises. Previously, the Central Bank of Brazil has intervened in the currency Real exchange rate through buying dollars. The Central Bank of Columbia has also launched a 3 month US dollar purchase plan to curb the appreciation of the Columbia peso.

In addition, Goldman Sachs analyst Brooks and Carlson expect foreign exchange reserves in emerging market countries, including Asia, to increase as a result of intervention in foreign exchange markets.

Watch out for big capital

Last year, emerging market currencies experienced a "roller coaster" market. The huge fluctuation of exchange rate attracted the attention of major international organizations and institutions. Some analysts worry that whenever foreign capital flows in large quantities, the emerging market currencies will appreciate sharply. With the massive outflow of capital, the currencies of these countries will depreciate sharply, and the rapid transformation will seriously impact the economy.

Although many Asian currencies are in a state of appreciation, they haven't broken the resistance limit of the recent trading ceiling. Yesterday, it was reported that private sector creditors who participated in the restructuring of Greece's voluntary debt were seriously inadequate and investors were cautious. With Asian and European stock markets and oil prices falling, Asian currency weakness has been consolidated.

Suresh, Kumar Ramanathan, Malaysia foreign exchange strategist, expects Asia Currency exchange rate 3 The month may go down. Some analysts say that if the scale of capital inflows is not as good as expected, it will lead to market correction. At the same time, interest rate trading in Asian currencies is ebbing.