The weakness of the Korean won, which has fallen by over 8% against the US dollar since the start of 2022, is likely to be welcomed by the country’s exporters, who face the prospect of a sharp slowdown in global demand over the coming year. However, a weaker currency is still a concern given the country’s inflation problem, and is another reason why we think the Bank of Korea will tighten monetary policy further over the coming months. Meanwhile, Pakistan looks to be on the cusp of agreeing the terms of a new deal with the IMF. This comes after the government took the key step of raising petrol prices and abolishing fuel subsidies. With foreign exchange reserves running low, a deal is essential to put the economy on a firmer footing.
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.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services