By Dr. Linda Yueh As China’s markets fall and drag down global equities, the underlying concern is undoubtedly how much a slowdown in the Chinese economy will affect the rest of the world. Since the 2008 global financial crisis, China has notably emerged as one of the twin engines of world growth. China has contributed as … Continue reading
A rout in emerging market (EM) stocks and currencies has deepened amid a series of devaluation events, oil prices at a six-year low and continuing to plunge amid a global glut, concerns about the U.S. Fed hiking interest rates, and growth concerns in China. Indeed, last week was a rough week for emerging markets: EM currencies … Continue reading
The largest exchange traded fund (ETF) that tracks South Korean equities, The iShares MSCI South Korea Capped ETF, just saw the largest weekly outflow since its inception back in 2000 as a rout in emerging markets deepens, oil prices continue to fall, concerns about the U.S. Fed hiking interest rates, and as tensions grow in the Korean peninsula between North and South Korea. … Continue reading
Kazakhstan’s currency fell by a record 23 percent in trade on Thursday after the country abandoned control of its exchange rate, as it became the latest emerging market to scrap efforts to prop up its currency before the U.S. Federal Reserve hikes interest rates. Kazakhstan is shifting to a free float of its currency and will pursue an inflation-targeting monetary … Continue reading
Vietnam’s Central bank has devalued the nation’s currency on Wednesday for the third time this year and widened the its trading band, in the latest sign of stress in Asian exchange rates following a move last week by China to devalue its currency. The State Bank of Vietnam weakened its currency reference rate by 1 percent and increased the … Continue reading
By Andrew Sheng and Xiao Geng Secular stagnation is looming worldwide, and China is no exception. Globally, the unprecedented monetary and fiscal stimulus following the 2008 financial crisis has caused debt, equity, and property prices to peak, even as trade and investment decline; all of this has depressed demand, economic growth, and inflation. For China, … Continue reading
China’s economy may not be expanding as much as we think and slower than its official data may suggest, according to a recent Bloomberg survey, which is helping to explain why policy makers in the nation have stepped up stimulus efforts and devalued the nation’s currency in a move to boost exports via a weaker yuan. According … Continue reading
By Mohamed A. El-Erian Oil prices have been heading south again, with a barrel of US crude recently falling below $42 – the lowest level since March 2009, the nadir of the global financial crisis. And, while last year’s sharp price drop was heavily influenced by two large supply shocks, the current decline also has an … Continue reading
Moody’s Investors Service lowered India’s economic growth forecast to 7 percent for 2015, from its previous estimate of 7.5 percent, as it believes that below normal monsoon rainfall will offset higher government spending and cautioned that further risks to growth stems from a slow pace of reforms. “We have revised our GDP growth forecast down to … Continue reading
By Pablo Druck, Nicolas Magud, Rodrigo Mariscal The strength of the US dollar can impact the economic activity in emerging economies in various ways. This column argues that appreciation of the dollar mitigates the impact of real GDP growth in emerging markets. The main transmission channel is through an income effect. As the dollar appreciates, commodity … Continue reading