Written by: Zach Chamberlain
Ever since the great recession, the world’s emerging economies and markets have provided incredible growth and profitability to investors across the globe.
However, some have argued that such markets are underpinning a significant and growing debt bubble, and one that has already seen Zambia essentially run out of money to pay its substantial borrowings.
Despite this, there remain several emerging forex markets for investors to consider, particularly in more developed currencies such as Brazil and Russia. Here is a look at three of the most lucrative:
1. The Brazilian Real
At the most recent time of asking, the Brazilian Real was recognised as the 19th most traded currency in the world, accounting for an average daily trade volume of $51 billion in 2016 alone.
Introduced in July 1994, the Real has tended to grow in line with the Brazilian economy, which has enjoyed average annual expansion of more than 2.5% overall. Brazil is now widely considered to be the eighth largest economy in the world with a GDP of $2.05 trillion, while it’s expected to reach fifth by the end of 2050.
Of course, this currency has fluctuated substantially in recent years, thanks largely to Brazil’s volatile economic and geopolitical situation. However, it has recovered since a recession in 2016, and aside from the short-term impact of the coronavirus, the economy (and by association, the Real) is poised to rebound in 2021.
At the heart of this is an increased focus on international growth and trade, which will also create a hike in capital inflows and cause the value of the national currency to soar.
2. The Thai Baht
Thailand has been one of the few success stories when dealing with the coronavirus pandemic, although it’s fair to say that the virus has impacted dramatically on the nation’s lucrative tourism sector.
However, the progress made on a potential vaccine has boosted the performance of the economy and the Thai Baht, which recently hit a 10-month peak as positive sentiment rose and foreign investors flocked to the country’s high-yielding debt.
There’s no doubt that forex traders have been particularly inclined to back the Baht in recent times, particularly against the US Dollar (USD). This is indicative of an emerging market with huge potential in Asia, with the Bank of Thailand providing an infrastructure that encourages widespread investment.
You can use forex brokers to chart the real-time performance of the Baht and hopefully make an informed decision with regards to your capital holdings.
3. The Russian Ruble
The Russian Ruble (which may sometimes be spelt ‘rouble’) is the official currency of the Russian Federation, while it is currently ranked as the 17th most traded globally.
As of 2016, an estimated $58 billion in Russian Rubles was traded daily, with this sum likely to increase markedly in line with growth of this emerging and fast-growing economy.
By 2050, Russia is expected to become the 6th biggest economy in the world (it’s currently ranked 11th), which its recent annual growth of 4% expected to increase significantly during the next 30 years.
This marks the Ruble as a viable medium-term investment, particularly in the debt-laden emerging markets. Of course, there’s an argument that this trend will begin to change unless the economy also looks to diversify, as Russia remains heavily dependent on exports of finite commodities such as oil, coal and natural gas.