29 Jan 2015
RUB, PHP and HUF appear as undervalued – BAML
FXStreet (Edinburgh) - According to a model used by analysts at Bank of America-Merrill Lynch, there are some EM currencies that still remain as undervalued.
Key Quotes
“EM FX continued to depreciate in 2014 on declining commodity prices and overall USD strength”.
“The model shows EM currencies are 0.9% undervalued on average on a multilateral basis, similar to last year’s valuations”.
“The cheapest EM currencies are the Russian ruble, the Philippine peso, and the Hungarian forint”.
“High current account surpluses relative to the large long-term equilibrium deficits according to the model, favor a stronger HUF and PHP in the long run”.
“The undervaluation of RUB is mostly driven by the recent dislocations in the currency markets, which we expect to partially reverse”.
Key Quotes
“EM FX continued to depreciate in 2014 on declining commodity prices and overall USD strength”.
“The model shows EM currencies are 0.9% undervalued on average on a multilateral basis, similar to last year’s valuations”.
“The cheapest EM currencies are the Russian ruble, the Philippine peso, and the Hungarian forint”.
“High current account surpluses relative to the large long-term equilibrium deficits according to the model, favor a stronger HUF and PHP in the long run”.
“The undervaluation of RUB is mostly driven by the recent dislocations in the currency markets, which we expect to partially reverse”.