LONDON (Reuters), JPMorgan (NYSE) announced Friday that the possibility of higher core yields in developed market markets will cause currencies across Europe, Middle East, and Africa to be affected. It said the outlook for these countries would make it “underweight”, a term used to describe its FX exposure.

In a note to clients, Saad Siddiqui from JPMorgan stated that the global inflation narrative was shifting from “temporary” to “permanent”, raising the possibility of sharp adjustments in core yields. This scenario is likely to cause serious damage to EM FX. We are therefore recommending that UW FX be turned in this area.

There were however, some regional differences on a more granular level. JPMorgan placed South Africa in underweight. There are more risks for the next year, after 2021. After a year of mostly “good news”, JPMorgan stated that it felt South Africa looked vulnerable and reiterated its prudent stance regarding the currency.

Both the Czech crown and Russia’s ruble were deemed “overweight”, so banks remained firm in their position.

According to the bank, “Impressive foundations have kept us constructive RUB despite recent geopolitical movements.”