EMerging Equity
IMF
Market Liquidity Not In Decline, But Prone To Evaporate
Low interest rates have supported market liquidity Changes in market structure make liquidity prone to evaporate in case of shocks Policymakers need to monitor risks, prepare for normalization of monetary policy The level of liquidity in financial markets—the ability to buy or sell a large quantity of a financial asset at a low cost in … Continue reading
Rise In Emerging Market Corporate Debt Driven By Global Factors
Firm borrowing has quadrupled in past decade Low interest rates, investor search for higher returns play role Emerging markets must prepare for higher interest rates Debt levels of firms in emerging market economies have risen, particularly in construction, and oil and gas, due to low interest rates in advanced economies, as well as other global … Continue reading
Commodity Exporters Facing Difficult Aftermath Of The Boom, IMF Says
With a weak outlook for commodity prices, particularly for energy and metals, growth in commodity-exporting emerging and developing economies could slow further over the next few years, says a new study. The study, published in the forthcoming 2015 World Economic Outlook, suggests that the recent declines in commodity prices could shave off one percentage point … Continue reading
Rationalising China’s Exchange Rate Policy
By Yukon Huang, Carnegie Endowment There are conflicts among the many objectives shaping China’s exchange rate policy. Politically, China’s leaders are keen on having the renminbi become a major international currency. For this purpose, the renminbi needs to be strong and stable enough that others will use it to settle trade balances and as a reserve … Continue reading
Monetary Policy Should Focus On Price Stability
Policy should aim to decrease risk of costly crises Generally more costs than benefits fixing crises with monetary policy Micro, macroprudential policy, regulation best to prevent crises Monetary policy should stick to its core mandate of price stability, and should deviate from its traditional role only if the benefits to the economy outweigh the costs, … Continue reading
With China Slowing, Faster Reforms Critical To Generate Jobs
By W. Raphael Lam, Xiaoguang Liu, and Alfred Schipke China is moving toward a “new normal” of safer and more sustainable growth.  To this end, ensuring its labor market stays resilient will be critical.  Reforms to contain vulnerabilities caused by buildup of credits may temporarily slow growth, and raise the unemployment rate, but supported through … Continue reading
Saudi Arabia Is Running Out of Money Faster Than Anyone Expected
Saudi Arabia may have a budget deficit of 19.5% of GDP this year unless it rapidly changes course and accommodates the new, cheap oil world, according to the IMF. Alas, the Kingdom has almost zero short term incentive to do so. A generous social contract rapidly fraying Saudi Arabia’s Kingdom is topped by the wealthy Saud … Continue reading
Washington’s Financial/Currency War On China: Eclipsing Of The Dollar By The Yuan – OpEd
By Mahdi Darius Nazemroaya The Chinese are in the process of displacing the monopoly of the US dollar. They are dropping their US Treasury bonds, stockpiling gold reserves, and opening regional distribution banks for their own national currency. This will give them easier access to capital markets and insulate them from financial manipulation by Washington and … Continue reading
Chinese Yuan Will Join IMF Reserve Currency Basket Earliest After September 2016
“The International Monetary Fund pushed back until Sept. 30, 2016, the date that China’s yuan could be included in its basket of reserve currencies,” Bloomberg reports. The news agency said the following: The executive board, which represents the IMF’s 188 member nations, voted Aug. 11 to extend the composition of the fund’s Special Drawing Rights for … Continue reading
China’s Transition To Slower But Better Growth
China is moving to a “new normal” of slower yet safer and more sustainable growth. This involves giving the market a more decisive role in the economy, says the IMF in its annual assessment of the economy. China’s growth is expected to be 6.8 percent in 2015, down from 7.4 percent last year. This slowdown, … Continue reading
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