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Thursday, 25 August 2016

Emerging markets take a hit on Wednesday over political risk, US rate hike possibility

Despite growing interest in emerging markets for investors in search of yields against the backdrop of zero or even negative interest rates in developed economies, emerging markets took a hit on Wednesday, led by concerns of political risk in South Africa and Turkey and expectations of a possible US rate hike, Reuters reported. “Fears are growing for South Africa’s economy and its credit rating after Finance Minister Pravin Gordhan, popular with investors and business, was ordered to report to police in relation to an investigation into a surveillance unit in the tax service,” Reuters’ Sujata Rao reports. Turkish shares and the lira fell on news that Turkish tanks have launched attacks in Syria against Daesh militants supported by warplanes from the US.

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