Although it’s been a long time coming and an even longer time expected, the Fed decided not to raise rates at the most recent FOMC meeting. This news comes as a bit of a disappointment to investors and economists, especially after the past week of downturn in American stock markets. However, it is the emerging markets that have experienced notable distress. Although some of the issues many of these nations face are chronic or fundamental inadequacies, the currencies have taken the hardest hit.

The Brazilian real, arguably the most accurate forex macro indicator for many emerging market countries, oscillated for an entire day in the market following the Fed’s decision. It initially rose about 1.3% (against USD), but this was swiftly followed with a 1.5% loss later that afternoon. Against the USD, this was the real’s weakest position in over a decade. Over in Eurasia, Turkey’s lira depreciated immediately but ultimately incurred losses at market close. Similarly, in South Africa, the rand enjoyed a brief period of depreciation followed by heavy losses at day’s end.  Indonesia’s rupiah rallied during the day but eventually fell, just like the others. Like Brazil, the rupiah broke records when it locked in its lowest level against the dollar since ’98.

Naturally, not all outcomes have been poor; international investors who stuck with equities of emerging market nations and managed to weather their portfolios through the 2008 crisis and the Chinese stock crash are realizing gains following the big decision.

Ostensibly, even inaction can cause some considerably strong ripples in the global economy. The Fed raising the rates is supposed to indicate a healthy, vibrant economy. This assumption applies to all economies though, not just America’s. Further postponing this rate hike is a not so subtle acknowledgement of the fact that the current international economic environment isn’t ideal to handle any negative ramifications of a hypothetical central bank policy. As understandable as this is, it begs the question: when will it be ideal enough for the Fed to take action? The threat of countries defaulting or stock markets crumbling will always be present, but the economy keeps moving regardless. It’s only a matter of opportunity, not so much time, at this point for the Fed to take advantage of, rather than presenting a timeline that isn't working for any party. 

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