These comments prompted financial markets to rethink their expectations of monetary policy and liquidity, and the result was a sharp sell-off in emerging Asian markets as investors remembered how the former Fed chief Ben Bernanke’s similar hints in 2013 caused the “taper tantrums” that rocked Asian equity and currency markets. Tighter US monetary policy could be a threat to emerging Asian markets and economies, going by previous experience. However, there are four good reasons why emerging Asia is better positioned today to deal with the likely turbulence in markets than in 2013. Third, better fundamentals have also strengthened emerging Asian markets’ resilience to financial turbulence. Overall, liquidity conditions will therefore continue to support asset prices globally as well as in emerging Asian markets.

Source: The Edge Markets June 30, 2021 04:32 UTC