Emerging market central banks building up foreign reserves

New York

CENTRAL banks in developing economies are taking advantage of the biggest rally in their currencies since 2010.

Led by Turkey and Thailand, they're using stronger exchange rates to build up foreign reserves for the first time in two years, replenishing shortfalls created as they attempted to prop up their currencies during recent routs. Bigger defences mean they'll be able to better ride out destabilising plunges in the future as they make their economies more appealing for traders, according to investment firms including Manulife Asset Management and GAM UK Ltd.