Arab Today, arab today emerging economies plea for end to us rates agony
Last Updated : GMT 15:29:21
Arab Today, arab today
Arab Today, arab today

Emerging economies plea for end to US rates agony

Arab Today, arab today

Arab Today, arab today Emerging economies plea for end to US rates agony

Emerging economies
Paris - AFP

Some of the world's biggest emerging economies are pleading for the United States to end their drawn-out agony and raise interest rates now.

Already hit by a commodities crash sparked by the slowing of China's once-booming economy, the mere prospect of the US Federal Reserve raising interest rates -- perhaps as soon as Thursday -- has battered the emerging giants that were once the world's top performers.

Lured by the promise of bigger returns when the Federal Reserve eventually begins raising interest rates, investors are already moving their money to safer, yet profitable, US destinations.

In August alone, panicky investors dumped equities held in emerging economies to the tune of $8.7 billion, according to the Institute of International Finance. The dollar meanwhile, has climbed.

The International Monetary Fund warned this month against a "premature" increase in US interest rates as the slowdown in Chinese growth and the ensuing commodities price collapse ripples through the world economy, and emerging economies in particular.

Some key emerging economies, however, would rather bring a swift end to the painful wait.

The Fed's decision is "probably the most anticipated event in the last century," Peru central bank chief Julio Valarde told the Nikkei Asian Review on a visit to Tokyo last week.

"What is surprising is how many central bankers with whom I talk prefer the hike to come as soon as possible," Valarde said, arguing that the uncertainty of the wait was more damaging than the interest rate increase itself.

Indian central bank governor Raghuram Rajan agreed.

"It's preferable to have a move early on and an advertised, slow move up rather than the Fed be forced to tighten more significantly down the line," he told the Wall Street Journal at the Jackson Hole, Wyoming, central bankers' meeting last month.

- 'Uncertainty created the turmoil' -

For Indonesia's central bank, too, the doubts are of the greatest concern.

"We think US monetary policymakers have got confused about what to do. The uncertainty has created the turmoil," Mirza Adityaswara, deputy governor at Indonesia's central bank, told the Financial Times.

"The situation will recover the sooner the Fed makes a decision and then gives expectation to the market that they increase one or two times and then stop," he said.

Financial markets have not forgotten the precedent of mid-2013 when then Federal Reserve governor Ben Bernanke evoked the possibility of a future increase in interest rates and sparked a flight of capital from emerging markets.

Hopes for an end to the agony may be dashed even if the Fed pulls the benchmark US federal funds rate up from zero percent, where it has been frozen since the financial crisis of 2008, analysts said.

Mixed figures on US employment and uncertainty over Chinese economic growth could prompt Federal Reserve chairwoman Janet Yellen to wait a little longer, analysts said.

Even if she acts, the speculation will live on, warned Philippe Waechter, economist at French investment bank Natixis Asset Management.

Emerging markets "think that if the US moves, the question of capital flight will be resolved and they can turn the page", he said.

"But I am not so sure."

Waechter said the Fed was unlikely to tighten in a series of small steps at every meeting. "If they raise on Thursday, then on Friday we will be asking when the next one comes."

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today emerging economies plea for end to us rates agony Arab Today, arab today emerging economies plea for end to us rates agony

 



Arab Today, arab today
Arab Today, arab today Mohamed Bahari prepares new collection for spring 2017

GMT 06:15 2017 Monday ,27 February

Mohamed Bahari prepares new collection for spring 2017
Arab Today, arab today 17.4 million tourists visit UAE in 2016

GMT 00:47 2017 Monday ,27 February

17.4 million tourists visit UAE in 2016
Arab Today, arab today Sheds light on major steps in 12-year career

GMT 06:07 2017 Monday ,27 February

Sheds light on major steps in 12-year career
Arab Today, arab today UN envoy sets out framework

GMT 07:25 2017 Monday ,27 February

UN envoy sets out framework
Arab Today, arab today Ayat Abaza says state TV presented major stars

GMT 03:52 2017 Sunday ,26 February

Ayat Abaza says state TV presented major stars
View News in Arabic - Business: اقتصاد دولي
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Reading therapy relieves mental disorders

GMT 15:39 2017 Friday ,24 February

Reading therapy relieves mental disorders
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Penguins in the age of dinos

GMT 11:44 2017 Saturday ,25 February

Penguins in the age of dinos
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today 'Constructive' Vauxhall talk with union

GMT 08:54 2017 Saturday ,25 February

'Constructive' Vauxhall talk with union
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Reasons for the delay 'On the Stairs of Servants'

GMT 06:42 2017 Saturday ,25 February

Reasons for the delay 'On the Stairs of Servants'
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage

GMT 07:23 2017 Friday ,24 February

Ola Ghanem hopes to work with M.Ramadan

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 18:23 2017 Friday ,24 February

Fadi explains secrets of  Nancy Ajram's newlook

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"

GMT 10:51 2017 Saturday ,25 February

Pigs with edited genes show resistance

GMT 14:04 2017 Friday ,24 February

Messi visit will contribute in tourism

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives heritage in jewelries
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday