Excluding China, emerging market capital flows regain 2018 levels

The International Monetary Fund said on Friday that total capital flows to emerging markets, excluding China, rose last year to $110 billion, or 0.6 percent of their economic output, the highest level since 2018.

According to the findings, which came in the International Monetary Fund’s external sector report, there is some resilience in emerging markets despite a sharp rise in US interest rates, which attracts money towards dollar-denominated assets.

The report said that emerging markets saw a decline in net portfolio flows, which are inherently volatile, but net foreign direct investment flows were more stable.