Equity flows were the dominant driver this month, with an estimated $14.6 billion in inflows, while debt flows were more moderate at $10.2 billion, according to the report by the Institute of International Finance.
Inflows were dominated by EM Asia, followed by Latin America, while EM Europe and Africa, West Asia saw modest outflows.
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“Regionally, EM Asia saw total inflows of $19.1 billion, followed by Latin America with inflows of $8.7 billion, while there were modest outflows from EM Europe and AFME,” the report noted.
Portfolio flows to EMs rose to $24.8 billion in July from $13.3 billion in the preceding month. Prior to that, EMs saw an outflow of $12.3 billion in May.
“In fact, July marked only the second month over the past year where portfolio flows were above their long-term average of $22 billion,” it added.
The recovery in flows during the past few months follows a period of exceptional weakness in EM portfolio flows that began with China’s mini-devaluation almost a year ago and saw cumulative outflows of $81 billion from EMs, compared to $96 billion during the global financial crisis.