NEW YORK, (Reuters) – Portfolio flows to emerging market countries slowed last month by $100 billion compared with a year ago and decreased from October. This was due to increased bets and weaker EM currencies and tighter U.S. monetary policies, according the Institute of International Finance.

According to IIF data, $15.6 billion was the non-resident flow into emerging markets last month. This compares with $18.6 million in October and $115.5 in November 2020.

According to IIF records dating back to 2005, the November 2020 inflow was by far the highest.

Last month’s inflows from emerging markets debt totaled $6.3 trillion, with nearly two-thirds going to China. Equities saw an inflow of $9.2Billion. $5B of that went to Chinese stocks.

Graphic: Portfolio flows into EM economies slow in November – https://graphics.reuters.com/GLOBAL-EMERGING/EMBARGOED/jnvweayalvw/chart.png

Jonathan Fortun from IIF said “Large Devaluations of EM Currency and Expectation of a Fed Tightening Cycle earlier than Expected affected the flow dynamic.” He added that worries over a COVID-19 new variant also contributed to weakening flows at the end.

Due to inflationary risk in the United States, tapering of bond purchases has been pushed back and rates at U.S. Federal Reserve have risen gradually. Many emerging market central banks are now tightening monetary policy.

EM currencies are suffering sharp losses in the face of a stronger dollar, even as interest rates increase. Last month saw the Russian ruble, South African rand, and Mexican peso all fall 4% to 4%, respectively. The Turkish lira, however, suffered its largest monthly loss ever, dropping nearly 29%.

According to an IIF Thursday note, flows to China’s emerging markets were “sudden stopped” in the fourth quarter.