Recent plans announced by the Turkish authorities to restrict access to lira-denominated loans to corporates with large FX holdings add to the growing risks stemming from corporates' large FX debts. Meanwhile, Poland and Hungary are moving closer to unlocking access to some EU funds but a lack of progress on reforms to the rule of law means that these are likely to be delayed for some time. A resolution to the dispute may give a boost to the beleaguered Hungarian forint, but it will not solve all the problems and macro imbalances that have made it one of the worst performing EM currencies this year.
EM Drop-In (Thurs, 7th July): Join our economists for their regular monthly briefing on the hot stories in EMs – and those that aren’t getting the attention they deserve. In this 20-minute session, topics will include the outlook for EM FX markets after the recent sell-offs. Register now.
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