AGL 40.00 No Change ▼ 0.00 (0%)
AIRLINK 127.04 No Change ▼ 0.00 (0%)
BOP 6.67 No Change ▼ 0.00 (0%)
CNERGY 4.51 No Change ▼ 0.00 (0%)
DCL 8.55 No Change ▼ 0.00 (0%)
DFML 41.44 No Change ▼ 0.00 (0%)
DGKC 86.85 No Change ▼ 0.00 (0%)
FCCL 32.28 No Change ▼ 0.00 (0%)
FFBL 64.80 No Change ▼ 0.00 (0%)
FFL 10.25 No Change ▼ 0.00 (0%)
HUBC 109.57 No Change ▼ 0.00 (0%)
HUMNL 14.68 No Change ▼ 0.00 (0%)
KEL 5.05 No Change ▼ 0.00 (0%)
KOSM 7.46 No Change ▼ 0.00 (0%)
MLCF 41.38 No Change ▼ 0.00 (0%)
NBP 60.41 No Change ▼ 0.00 (0%)
OGDC 190.10 No Change ▼ 0.00 (0%)
PAEL 27.83 No Change ▼ 0.00 (0%)
PIBTL 7.83 No Change ▼ 0.00 (0%)
PPL 150.06 No Change ▼ 0.00 (0%)
PRL 26.88 No Change ▼ 0.00 (0%)
PTC 16.07 No Change ▼ 0.00 (0%)
SEARL 86.00 No Change ▼ 0.00 (0%)
TELE 7.71 No Change ▼ 0.00 (0%)
TOMCL 35.41 No Change ▼ 0.00 (0%)
TPLP 8.12 No Change ▼ 0.00 (0%)
TREET 16.41 No Change ▼ 0.00 (0%)
TRG 53.29 No Change ▼ 0.00 (0%)
UNITY 26.16 No Change ▼ 0.00 (0%)
WTL 1.26 No Change ▼ 0.00 (0%)
BR100 9,979 Increased By 95.2 (0.96%)
BR30 31,121 Increased By 520.9 (1.7%)
KSE100 94,026 Increased By 670.8 (0.72%)
KSE30 29,136 Increased By 204.8 (0.71%)

LONDON: Nomura has warned that seven countries – Egypt, Romania, Sri Lanka, Turkey, Czech Republic, Pakistan and Hungary – are now at a high risk of currency crises.

The Japanese bank said that 22 of the 32 countries covered by its in-house ‘Damocles’ warning system have seen their risk rise since its last update since May, with the largest increases in the Czech Republic and Brazil.

It meant the sum of the scores generated on all 32 by the model had increased sharply to 2,234 from 1,744 since May.

Rupee ends losing streak, gains 0.11% against US dollar

“This is the highest total score since July 1999 and not too far from the peak of 2,692 during the height of the Asian crisis,” Nomura economists said, calling it “an ominous warning sign of the growing broad-based risk in EM currencies”.

The model crunches 8 key indicators on a country’s FX reserves, exchange rate, financial health and interest rates to give an overall score.

Based on data from 61 different EM currency crises since 1996, Nomura estimates that a score above 100 indicates a 64% chance of a currency crisis in the following 12 months.

Egypt, which has already devalued its currency heavily twice this year and sought an International Monetary Fund (IMF) programme, now generates the worst score at 165.

Romania is next on 145 having been propping up its currency with interventions. Default-stricken Sri Lanka and currency crisis-regular Turkey both generate scores of 138, while the Czech Republic, Pakistan and Hungary notch 126, 120 and 100, respectively.

Pakistan’s perceived default risk worsens ‘owing to IMF uncertainty’

Nomura also ran the Damocles model on the G7 group of leading economies, with the results showing that all but Japan now have Damocles scores above the 100 threshold, led by the United States and Britain.

EM economies are still more vulnerable. Most have not fully recovered from the COVID-19 pandemic and now face high inflation, limited fiscal space, negative real interest rates, a weaker balance of payments and diminished FX reserve cover.

“It is somewhat surprising that there have not been more full-blown EM currency crises this year,” Nomura added.

“Then again, EM challenges are far from over… The late Professor Rudiger Dornbusch once said, A crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought”.

Comments

Comments are closed.

samir sardana Nov 23, 2022 03:19am
WRONG ! PAKISTAN STANDS OUT ! SBP DOES NOT HAVE A PEG OR NAVIGATION CHANNEL FOR THE PKR ! IT IS ON FREE FLOAT OTHER NATIONS HAVE REVALUED OR DEVALUED OR PROPPED UP THE FX ! PAKISTAN FX IS LINKED TO OIL AND GAS AND IMF LOANS . THAT IS NOT THE CASE WITH THE OTHERS. OTHERS HAVE TOURISM (LANKA),TURKEY IS AN OIL AND GAS PRODUCER AND EASTERN EU NATIONS ARE SERVICES ECONOMIES WITH LOW POPULATION BASE AND NOT SENsITIVE TO OIL AND GAS. OIL AND GAS AND IMF LOANS FOR PAKISTAN ARE UNDER CONTROL ! ROI IN PAKISTAN IS NOT LIKE IN LANKA OR TURKEY MOST IMPORTANTLY,THE 220 MILLION PEOPLE MEANS THAT THERE AVENUES FOR GOP TO RAISE MONEY AND LEVELISE THE BURDEN ACROSS 220 MILLION. YOU CANT DO THIS IN OTHER NATIONS - 1ST DUE TO POPULATION SIZE AND 2ND - CIA AND SOROS ARE WAITING TO START AN INSURRECTION ! COME WHAT MAY PRC/SAUDIA AND USA WILL BAIL OUT PAKISTAN DUE TO THE TRITIUM BOOSTER, IN THE FUSION BOMB.THIS TRUMP CARD IS WITH NONE ELSE. THAT IS THE GENIUS OF PAKISTAN !dindooohindoo
thumb_up Recommended (0)