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The US Federal Reserve Is Losing Its Way To Emerging Markets.

2014/2/11 14:34:00 165

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At the beginning of the year of P, there was a great turbulence in emerging markets, double bonds and currency devaluation. The speed of QE withdrawal by the Federal Reserve is undoubtedly the main cause of the current turmoil.

the currencies of many emerging market countries were heavily sell-off, causing the market to worry about the RMB exchange rate.

Many experts said that China is fully capable of maintaining the stability of the RMB exchange rate.

In fact, since the beginning of this year, only RMB has appreciated against the US dollar in the 24 most important emerging market currencies in the world, indicating that investors have voted a confident vote for the renminbi.

2014 was the year when the Federal Reserve withdrew from QE. When the United States slowly withdrew the life support system, the emerging markets were hit hard.

< a > href= > http://www.91se91.com/news/list.aspx > Classid=101112107107 > Federal Reserve < /a > continue to "go one's own way". /p >

early February, Turkey lira depreciated greatly.

The Central Bank of Turkey decided to raise overnight lending rates from 7.75% to 12% and raise overnight lending rates from 6.75% to 11.5%.

But just a day later, lira was again sold by investors.

South African rand also suffered a setback.

Although the South African Central Bank announced a 50 basis point increase in interest rates, the US dollar did not rise against South African rand, a record.

in addition, currencies in Argentina and Russia also fell to low levels for many years.

market participants read that the Fed's further efforts to withdraw from the QE show that the Fed has adopted its own way on this issue and totally ignored the turbulence in the emerging market.

It is worth mentioning that in the latest statement of the Fed, there is no mention of the recent emerging market currency devaluation storms in Turkey, Argentina and other countries.

"if the Fed continues to go its own way, there may be new market turmoil in emerging markets."

Citibank's foreign exchange strategy department director said frankly, "but in a highly globalized economy, no country can decide monetary policy regardless of the external environment.

The Fed is still watching the dynamics of emerging markets closely, and will take action in the trend of systemic instability in emerging markets, and the current turmoil is limited to some countries. "

< a > href= > http://www.91se91.com/news/list.aspx > Classid=101112107102 > RMB > /a > why is it unique? /p >

a large number of emerging countries' currency devaluation occurred before and after the Spring Festival in China.

The index of liquidity in emerging markets of China Merchants Securities shows that the index level and fall are close to the level of QE expected to withdraw from the first fermentation last year.

During the Spring Festival, the currency crash of the emerging economies also affected the mood of the Chinese market to some extent during the period of P.

On the first trading day after the Spring Festival, the spot exchange rate of RMB against the US dollar is around 6.0634, the lowest level since this year.

In February 10th, the central parity rate of the RMB against the US dollar was 6.1083, and the appreciation of the renminbi was expected to decline significantly.

Ma Jun, chief economist of Greater China in Germany, said P is not equal to these emerging market countries.

first, the RMB exchange rate has remained stable in the past few weeks and will continue to be strong.

From December 2013 to February 5, 2014, Argentina Peso depreciated 22% against the US dollar, while Turkey lira depreciated 8.6% against the US dollar, but the yuan appreciated slightly 0.5% against the US dollar.

Below P, China's economic fundamentals are better than other emerging economies, including more substantial economic growth, more reasonable current account surpluses, more controllable external debt levels and more moderate inflation.

DBS Bank economist Zhou Hongli judged that China has the ability to maintain RMB exchange rate stability under the premise that China's fundamentals are better, its current account surplus and its debt level are controllable, and it has a foreign exchange reserve of 3 trillion and 800 billion US dollars.

"Of course, the phasing adjustment of the RMB exchange rate is normal, and the decision-making level can take this opportunity to increase the flexibility of the RMB exchange rate."

Zhu Haibin, chief economist of J.P. Morgan, expects that the RMB will appreciate moderately to 6 against the US dollar in 2014.

Meanwhile, as part of the financial reform, the daily trading volume of RMB will be increased from 1% to 2%.

can China become a beneficiary of global liquidity change? /p >

although experts say the renminbi will not follow the same pesos, China can not take lightly the overseas liquidity environment in the process of the gradual withdrawal of the QE from the US Federal Reserve.

Zhang Yiping, senior analyst of China Merchants Securities macroeconomic analyst, predicts that "a href=" http://www.91se91.com/news/list.aspx "Classid=101112107101" QE exit "/a" will bring about the pressure of arbitrage fund outflow in the short term, resulting in the contraction of foreign exchange in China. In the medium term, the complexity of overseas liquidity environment is increasing.

In the future, if the Fed's policy orientation is repeated, the sharp fluctuation and reversal or inevitable of foreign exchange movements will occur.

In addition, the movements of the European Central Bank, the Bank of Japan and the exchange rate policy of the people's Bank of China will affect capital flows.

analysts believe that in 2014 and the next few years, the emerging market economy will be faced with a period of great differentiation and great adjustment. Those poor fundamentals will become the object of investors' abandonment, while the "physically strong" economies will be favored by investors.

Therefore, the current global economic environment is both a challenge and an opportunity for China.

the challenge lies in the fact that over the past few years, the rapid economic growth and the appreciation of the renminbi have attracted large amounts of capital to enter China, which has significantly promoted domestic asset prices.

Once a large amount of capital flows out, it will have a great impact on our economy.

the opportunity is that although China's economic growth is slowing down, it still maintains a high level of over 7.5%; besides, China still has huge domestic consumption market.

When international capital is worried about emerging markets, if China's economy remains stable and the RMB exchange rate remains stable, it will stabilize the situation of international capital outflow, and even attract uneasy international capital inflows to become the beneficiaries of global liquidity changes.

Chen Gong, chief researcher of Ampang consulting, said that the most important thing for China to maintain stability in 2014 is to maintain stable economic growth and maintain the stability of the RMB exchange rate, so as to maintain the confidence of the international and domestic markets to China's < a href= "http://www.91se91.com/news/list.aspx Classid=101112107108" > economic prospects < /a > P.

"Whether macroeconomic policies, industrial development policies, or policies to stimulate consumption and open markets, we can focus on maintaining stability."

In January 2014, the world's 24 main emerging market currencies only appreciated against the US dollar and the rest of the world depreciated, of which 3 currencies fell more than 5%.