Question

Looking at the impact of covid-19, did the majority of emerging market currencies depreciate or appreciate during 2020?

1) Depreciate
2) Appreciate

Answer 1

In 2020, the majority of emerging market currencies depreciated due to the global economic impact of the COVID-19 pandemic.

Step-by-step explanation:

In 2020, the majority of emerging market currencies depreciated. Due to the global economic impact of the COVID-19 pandemic, many countries experienced a decrease in demand for their currency, leading to a depreciation. This happened because of various factors, such as reduced tourism, decreased foreign investment, and economic uncertainty.

For example, countries heavily reliant on tourism, such as Thailand, saw their currency depreciate as international travel came to a halt. Additionally, countries with high levels of external debt and limited foreign reserves were particularly vulnerable to currency depreciation.

Overall, the depreciation of emerging market currencies in 2020 was a result of the challenging economic conditions caused by the pandemic.