Emerging-market currencies weakened on Monday as investors shifted toward the dollar, with signs that U.S. interest rates may stay elevated for longer. The move put fresh pressure on risk-sensitive assets and helped push capital out of emerging markets.

The Brazilian real and South African rand led the declines among major developing-world currencies. Traders cited a stronger dollar and expectations for tighter financial conditions in the United States as the main forces behind the selloff.

Reuters reported that emerging markets saw $2.1 billion in outflows as the currency slide intensified. The broader retreat reflected caution among investors who are weighing inflation risks, growth concerns, and the appeal of dollar-denominated assets.

Analysts say the trend could keep pressure on currencies, debt, and local markets if U.S. rate expectations remain firm. For emerging economies, that can raise borrowing costs and complicate efforts to stabilize prices and support growth.

Dollar strength

Emerging-market currencies fall as dollar gains and investors pull $2.1 billion