The remaining Fragile Five has made much less progress. Morgan Stanley says Turkey has completed no more than 10 percent of recommended reforms, Brazil 15 percent and South Africa barely anything.
Current-accounts shortfalls and inflation remain high in each and politics in the form of a widening corruption scandal at Petroleo Brasileiro SA in Brazil and lawmaker pressure on Turkey’s central bank are worrying investors. Such an environment has reduced their ability to cut interest rates and Brazil and South Africa may even hike them this year.
(Bloomberg 17/3/15)
