Press Release
May 28, 2015

Capital flows to emerging markets are projected to slow to $981 billion in 2015, their lowest level since 2009, according to the IIF’s May report on Capital Flows to Emerging Markets.

“Weak EM growth performance is taking a heavy toll on capital inflows to EMs, which we now estimate at only $150 billion in Q1 2015, the lowest rate in six years”, said Charles Collyns, chief economist at the IIF. “We do project a moderate pickup of flows later in 2015 and 2016, but this depends on some strengthening of growth and no surprises from the Fed. Continued economic weakness or a bumpy Fed ride could lead to further stagnation of EM capital inflows.”

 “A deterioration of secondary market liquidity and increased corporate indebtedness across emerging markets could exacerbate the fallout from a potential EM stress event,” said Hung Tran, executive managing director at the IIF. “In an environment of rising global interest rates, Fed tightening, EM currency depreciation, and slowing economic growth and capital flows, USD-denominated debt may become more difficult for many EM non-financial corporate companies to service and refinance their debt.”

Press Release
May 19, 2015

Emerging market portfolio flows have suffered a significant retrenchment since early May, according to the first issue of the IIF Flows Alert.

“EM outflows seem to have been triggered by the fallout from the global bond tantrum,” said Charles Collyns, chief economist at the IIF. “Even though the impact on EM spreads has been fairly limited so far, our data shows that the jump in global market interest rates has spilled over into portfolio outflows from emerging markets.”

IIF Flows Alerts are an early warning system that is based on daily portfolio flows to 7 EMs, including India, Indonesia, Korea, Thailand, South Africa, Brazil, and Hungary. Collectively, these countries suffered outflows of $3.2 billion in the first half of May. The reversal was broad-based, affecting all countries except Brazil.

Press Release
May 18, 2015

The Institute of International Finance today issued the following statement on discussions between the Ukrainian government and the bondholder committee.  

“On May 12, 2015, Ukraine's Ministry of Finance posted a statement in its website referring to the IIF Principles of transparency and disclosure, in the context of its discussion with the bondholder committee about a restructuring of its international debt obligations.”

Press Release
May 13, 2015

Emerging market GDP growth is on track to decline further in Q2 to 1.6 percent from 1.9 percent in Q1, according to the April update of the IIF’s EM Coincident Indicator. This marks the weakest reading since spring of 2009.

“Emerging markets started Q2 on a very weak note, with a downshift in both real activity and business surveys,” said Kristina Morkunaite, lead author of the report. “However, the pace of deceleration has at least eased, and a pickup in financial market variables provides grounds for cautious optimism that the downturn has now almost run its course.”

Press Release
May 6, 2015

Global fund investors have increased exposure to emerging markets in April, according to the IIF’s latest Trends in Investment Fund Portfolio Allocation report.

“Fund portfolio weights for emerging market equities and fixed income securities increased modestly in April”, noted Sonja Gibbs, director of capital and emerging markets policy at the IIF. “U.S. investors have been the most important source of EM bond and equity fund investment in recent weeks, while in their quest for yield, Euro Area investors continued to favor emerging market funds over emerging market equity funds.”

Press Release
May 1, 2015

Bank lending conditions in emerging economies tightened abruptly to their weakest level in three years in 2015Q1, according to the latest Emerging Markets Bank Lending Conditions Survey from the Institute of International Finance.

“The sharp tightening of EM bank lending conditions is further evidence that emerging market economies are struggling,” said Charles Collyns, chief economist at the IIF. “In addition to a demand slowdown, supply conditions continued to deteriorate. Banks reported a continued tightening in funding conditions, likely reflecting the cautious tone in EM financial markets, at least until the March FOMC meeting”.

Press Release
April 30, 2015

Driven by zero rates, plentiful liquidity and the expectation that this stimulus will ultimately fuel stronger global growth, financial markets have been buoyant, but this suggests that distortions may be building up, according to the latest Capital Markets Monitor from the Institute of International Finance.

“Depending on how long the “Goldilocks” economy can be sustained, market participants may be faced with a binary set of challenges – a potential disorderly adjustment if U.S. tightening is more aggressive than currently expected, or a potential “decade of zero rates” – which could have a range of negative consequences,” said Hung Tran, executive managing director at the IIF.

Press Release
April 29, 2015

Portfolio flows to emerging markets picked up to $35 billion in April, making the strongest inflows since June 2014, according the latest EM Portfolio Flows Tracker by the Institute of International Finance.

“EM portfolio flows have gained momentum in recent months," said Robin Koepke, an economist at the IIF and lead author of the report. “Strong inflows in April seem to reflect dovish signals from the Fed that have reduced market expectations of rate hikes. We are concerned that flows may well continue to be volatile in the months ahead in the face of further shifts in market expectations about the timing and pace of Fed liftoff, especially if there is evidence of tightening U.S. labor markets.”

Press Release
April 27, 2015

The Institute of International Finance today announced that Martin Boer has been named Director of the Regulatory Affairs Department effective May 1st.

Boer recently served as the Secretary General of the European Financial Services Round Table, a Brussels based industry organization comprising the CEO’s and Chairmen of Europe’s 22 leading banks and insurance companies.

Press Release
April 23, 2015

This year has not started as well as hoped. Activity data have disappointed in 2015Q1 and business confidence has deteriorated, leading the Institute of International Finance to revise down its global growth forecast to 2.8 percent for the year, unchanged from 2014.

“The headline message of our updated outlook is again one of disappointed hopes. Global growth looks to have fallen to 2 percent in the first quarter, the lowest rate since 2014Q1,” said Charles Collyns, chief economist at the IIF. “We do still expect a growth to strengthen into 2016, but we are concerned that the global economy could remain under strain. Our biggest concerns are that supply-side problems could prompt an abrupt upward shift in the expected trajectory of Fed lift-off and the possibility of a steep growth slowdown in China.” 


Media Contacts

Andrew DeSouza
Tel: +1-202-857-3602 

Emily Klopf
Tel: +1-202-857-3626