Arab Today, arab today emerging economies plea for end to us rates agony
Last Updated : GMT 21:48:38
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."

arabstoday
arabstoday

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

 



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 Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today Lufthansa chief eyes up to 78

GMT 11:29 2017 Thursday ,21 September

Lufthansa chief eyes up to 78
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Rouhani at UN defends Iran nuclear deal

GMT 09:41 2017 Thursday ,21 September

Rouhani at UN defends Iran nuclear deal
Arab Today, arab today Saudi Arabia to unblock internet calling apps

GMT 11:31 2017 Wednesday ,20 September

Saudi Arabia to unblock internet calling apps
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Ministry seeks to improve education

GMT 14:49 2017 Sunday ,17 September

Ministry seeks to improve education
Arab Today, arab today China lifts 10-year travel ban

GMT 18:09 2017 Thursday ,21 September

China lifts 10-year travel ban
Arab Today, arab today Puerto Rico, Virgin Islands brace

GMT 12:01 2017 Wednesday ,20 September

Puerto Rico, Virgin Islands brace
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Intel chips loaded in Waymo

GMT 14:43 2017 Wednesday ,20 September

Intel chips loaded in Waymo
Arab Today, arab today Five trends at the Frankfurt auto show

GMT 12:04 2017 Monday ,18 September

Five trends at the Frankfurt auto show
Arab Today, arab today Actress Ream Hhagag prepares for a new film

GMT 09:40 2017 Tuesday ,19 September

Actress Ream Hhagag prepares for a new film
Arab Today, arab today France hopeful of persuading Trump

GMT 06:21 2017 Wednesday ,20 September

France hopeful of persuading Trump

GMT 12:14 2017 Monday ,18 September

Horia Farghaly happy for success of “Case G”

GMT 10:35 2017 Thursday ,14 September

New Zealand opposition looks

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 19:18 2017 Monday ,18 September

5,000 'Dieselgate' deaths in Europe per year

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 04:49 2017 Wednesday ,20 September

WHO urges Yemen to accept vaccines

GMT 16:04 2017 Tuesday ,19 September

Egypt tourism revival steady but slow

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 12:46 2017 Thursday ,21 September

Google likely to buy stake in Taiwan smartphone maker HTC

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
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