Emerging Markets Boosted by Interventions as Rate Fears Grow

Expectations of central-bank interventions are helping to steady emerging-market currencies, even as traders adjust to a higher-for-longer regime for developed market interest rates.

US and European moves to tame inflation have prompted investors to exit some riskier emerging assets this year. But emerging markets’ recent efforts to defend their currencies have put a floor under declines — even as US consumer price index data Wednesday left the door open for additional interest-rate hikes from the Federal Reserve.

China, for instance, has ramped up its fight against yuan bears after the currency slumped to near record lows offshore, while an aide to Poland’s prime minister has also weighed in in support of the zloty.

A gauge of developing-nation currencies gained 0.2% overall after the US data, while emerging-market stocks slid just 0.1% for the session, erasing earlier losses.

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