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Emerging-Market Debt Drops 4.5% Amid Iran War Uncertainty

3/23/2026

Summary

Story summary

Emerging-market local-currency debt has fallen over 4.5% since the onset of the Iran war, nearly double the decline of dollar-denominated bonds.
High oil prices and inflation concerns have heightened volatility, prompting policymakers to consider prolonged elevated interest rates.
Colombia's bonds gained 3.6%, while South Africa and Hungary lost about 10%.
Analysts urge focusing on high-beta Asian currencies, South Korean won and Taiwanese dollar, due to stronger central-bank responses.

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Story summary

Emerging-market local-currency debt has fallen over 4.5% since the onset of the Iran war, nearly double the decline of dollar-denominated bonds.
High oil prices and inflation concerns have heightened volatility, prompting policymakers to consider prolonged elevated interest rates.
Colombia's bonds gained 3.6%, while South Africa and Hungary lost about 10%.
Analysts urge focusing on high-beta Asian currencies, South Korean won and Taiwanese dollar, due to stronger central-bank responses.