Return to the Washington consensus

Synopsis

Chinese growth has slowed, signaling the end of the commodities super cycle. The discussion highlights the implications of this slowdown and the anticipated end of quantitative easing in the U.S. Jonathan Wheatley, deputy emerging markets editor, analyzes the performance of various emerging market currencies against the dollar since the start of the year. He notes that while some currencies, like the Indonesian rupiah and Indian rupee, have suffered due to significant current account deficits, others, such as the Polish zloty and Chilean peso, have fared better. This indicates that investors are discerning, recognizing which countries have managed their economic situations effectively. For instance, Chile's current account deficit is mitigated by a robust sovereign wealth fund that benefits from copper exports. The overall picture reveals a complex landscape in emerging markets, where structural reforms are crucial for stability and growth.