The MSCI Index, which tracks emerging market currencies, climbed to a record high last Friday, as the dollar posted its biggest weekly drop in 2021, despite rising US yields. For investors from developing countries, this scenario is a good chance to enter the market.
The Turkish lira is the one who grew the most, and economists expect the central bank to pursue tight monetary policy following January's inflation figures.
Bloomberg, on the other hand, predicts that the CBRT will keep the weekly repo rate at 17%. "Although the lira is up, reserves are also growing so there is no reason for further rate hikes," Bloomberg said.
Meanwhile in Indonesia, politicians are likely to weaken their positions, and the Bank of Indonesia is expected to cut benchmark interest rates by 25 basis points.
In any case, trading is likely to be easy this week, as Monday is a holiday in the US and the Chinese markets will be closed until Thursday. Taiwan will also reopen on Wednesday, while the week in Brazil and Argentina will be shortened due to carnival holiday.
In another note, Hungary aims to vaccinate 2 million people by using the vaccine developed in China.
Meanwhile, Venezuela has received the first 100,000 doses of the Sputnik-V vaccine.
The International Monetary Fund will also complete a remote review of its $ 5 billion loan program with Ukraine.
Today, India's trade data for January will be released, but it will probably not perform well. The rupee was among the worst performing last week, despite rapid progress in vaccination.
China's current account data for the fourth quarter will be released on Friday.
The data on net foreign exchange settlements for January will be closely watched, especially after the very strong jump in exchange rates in December. It is possible that the improvement in conversion rates will put pressure on the yuan.
Meanwhile, Colombia's Q4 GDP is likely to indicate economic recovery, but it will remain below pre-pandemic levels.
Economic activity in Peru (for December 2020) will also be released, and it will most likely show a similar picture, since economic growth is gradually recovering.