Stronger emerging economies are likely to pull further ahead from weaker peers following the moves by global leaders to augment the lending capacity of the International Monetary Fund.
Emerging markets were the focal point of the Group of 20's $1.1 trillion blueprint to revive the global economy announced on Thursday, including a tripling of IMF resources.
The increase in IMF firepower comes on the heels of a newly created flexible credit line facility that is expected to boost investor confidence in stronger emerging-market names.
"Countries that are already doing well will benefit the most as the new facility gives them better access to IMF money, insuring them against contagion effects from weaker emerging economies," said Lars Christensen, head of New Europe research at Danske Bank in Copenhagen. "For economies that are already in bad shape, not much will change."
Unveiled in March, the new credit line is designed to give well-run economies access to IMF money that can be either tapped immediately or kept as a guarantee in case international financial conditions worsen.
With its revamped borrowing conditions, the new facility has lessened the stigma attached to IMF financing as a sign of economic distress.
Mexico, which has an investment grade credit rating, on Wednesday was the first country to take such a credit line.
News it had secured $47 billion in contingency funds drove its peso currency more 2 percent higher against the dollar.
Brazil, Indonesia, Poland, South Africa and South Korea are seen as possible candidates for the new facility.
"It's no longer perceived as going to the IMF with a begging bowl but it will be more like taking out a precautionary bank overdraft," said Nigel Rendell, RBC Capital Markets senior emerging markets strategist.
Emerging markets were the focal point of the Group of 20's $1.1 trillion blueprint to revive the global economy announced on Thursday, including a tripling of IMF resources.
The increase in IMF firepower comes on the heels of a newly created flexible credit line facility that is expected to boost investor confidence in stronger emerging-market names.
"Countries that are already doing well will benefit the most as the new facility gives them better access to IMF money, insuring them against contagion effects from weaker emerging economies," said Lars Christensen, head of New Europe research at Danske Bank in Copenhagen. "For economies that are already in bad shape, not much will change."
Unveiled in March, the new credit line is designed to give well-run economies access to IMF money that can be either tapped immediately or kept as a guarantee in case international financial conditions worsen.
With its revamped borrowing conditions, the new facility has lessened the stigma attached to IMF financing as a sign of economic distress.
Mexico, which has an investment grade credit rating, on Wednesday was the first country to take such a credit line.
News it had secured $47 billion in contingency funds drove its peso currency more 2 percent higher against the dollar.
Brazil, Indonesia, Poland, South Africa and South Korea are seen as possible candidates for the new facility.
"It's no longer perceived as going to the IMF with a begging bowl but it will be more like taking out a precautionary bank overdraft," said Nigel Rendell, RBC Capital Markets senior emerging markets strategist.
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