Company: TXEMF
Filing Date: 2025-03-03
Form Type: N-CSR
Source: 0001133228-25-001853
Chunk: 4

Company: TEMPLETON EMERGING MARKETS INCOME FUND
Filing Date: 2025-03-03
Form: N-CSR
Chunk 4
---

again

an

exception,

where

higher

inflation

has

taken

hold

amid

a

strengthening

economy.

The

U.S.

dollar

(USD)

(as

measured

by

the

DXY

dollar

index)

moved

higher

during

much

of

the

first

half

of

the

year,

then

fell

back

sharply

in

the

third

quarter

before

rebounding

in

the

fourth

quarter.

These

currency

moves

seemed

largely

driven

by

evolving

expectations

of

U.S.

interest-rate

moves.

Overall,

the

DXY

dollar

index

rose

7.1%

over

2024.

Almost

all

currencies

depreciated

against

the

USD

over

the

year.

Most

sovereign

bond

yields

rose

over

2024

(with

a

handful

of

exceptions),

with

interim

moves

largely

reflecting

changing

interest-rate

expectations.

#### Q.

#### How

#### did

#### we

#### respond

#### to

#### these

#### changing

#### market

#### conditions?

#### A.
We

continued

to

aim

at

a

high

overall

portfolio

yield

by

holding

higher-yielding

local-currency

positions

in

specific

emerging

markets.

In

this

regard,

we

have

emphasized

select

local-currency

sovereign

bonds

in

countries

that

we

view

as

having

resilient

fundamentals.

As

the

easing

monetary

policy

cycle

gained

further

traction,

we

identified

opportunities

where

we

could

extend

duration,

based

on

our

identification

of

positive

cyclical

fundamentals

with

respect

to

inflation

and

interest

rates.

We

also

identified

sovereign

credit

opportunities

that

we

expected

to

benefit

from

declining

developed

market

interest

rates.

In

foreign

exchange

exposure,

we

considered

countries

whose

currencies

were

likely

to

benefit