Brics experience currency depreciation
The most powerful bloc of emerging economies, known collectively as Brics, is experiencing what has been described as the biggest currency deprecation since 1998.
For the past 15 years, Brazil, Russia, India and China – and South Africa in recent times – have experienced exponential economic growth, transforming them into hugely powerful nations.
This has, in turn, led to an increase in direct foreign investment, with companies sending employers overseas. International relocation aimed at making the most of the opportunities available has been shrewd “business sense”.
However, as Bloomberg reported, the Brazilian real, the Russian ruble and the Indian rupee have been decreasing in value the most among developing-nation currencies.
Stephen Jen, a former economist at the International Monetary Fund, told the online news provider: “When the global economy and capital flow slow down, it’s going to expose a lot of problems in these countries and make people stop and ask questions. A run on the currency could be particularly ugly.”
In spite of this news, Brics are set to enjoy many decades of growth, albeit at a slower pace than expected, with the eurozone crisis partly to blame.
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