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Finance
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2000-04-13 15:50:00-04
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Capital Flows to Emerging Markets Rises
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Institute of International Finance says private capital to emerging markets will rise this year by 25% to US$200 billion
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Reporting at its annual spring meeting at the Hague, Netherlands, the Institute of International Finance, said that net private capital flow to emerging markets would increase to US$200 billion from $150 billion this year. The banking organization said such flows had increased as confidence returns in the emerging markets and in spite of 'volatile' financial markets in developed countries. Equity investments in emerging markets are expected to reach $170billion this year from $162 billion in 1999 with direct equity investment moderate at $130 billion. The IIF report noted that direct equity investment had continually risen in the last decade, in spite of crises that have affected other capital flows. Portfolio equity flows to the emerging economies should double to $42 billion from $21 billion last year. The flow to Asia will reach $24 billion. Net private credit flows will rebound to $26 billion from $12 billion this year. Net repayments to commercial banks would be $11 billion this year, down from $41 billion in 1999 and would be concentrated in Indonesia and Thailand. Bond financing will increase to $37 billion. Major emerging market borrowers issued $25 billion of international bonds in the first quarter of 2000.
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