Prevent U.S.-triggered shock from expanding, affecting world economy
The money that flowed into emerging economies from advanced countries due to the latter’s monetary easing has started flowing back in reaction to rising interest rates in the United States. It will be important for various nations to closely cooperate in stabilizing financial markets.
With its economy continuing to expand for more than eight years, the United States is going ahead with an interest-rate increase to end its large-scale monetary relaxation. Last month, long-term interest rates in the United States temporarily exceeded 3 percent for the first time in four years and three months.
The Argentine peso is sharply falling against the U.S dollar. The situation finally prompted Argentina to ask the International Monetary Fund for assistance last week.
The IMF is poised to supply funds for peso-buying and dollar-selling by the Argentine authorities. The move is aimed at countering the persistent peso-selling pressure in the market.
Many emerging nations, such as Turkey, Brazil and India, are faced with a sharp decline in their currency values. Although they have successively adopted a policy of raising their interest rates to raise their currency values, the defensive measure solely taken by each country is less decisive in achieving the goal. There is no wiping out the uncertainty regarding the Chinese economy, either. (217 words)
______ min. ______ sec.