[ad_1]
Mumbai: India and other emerging countries Markets such as Indonesia, Brazil, Turkey and Argentina will continue their monetary tightening in 2019, said Moody's valuation company Investors Service.
"Rising global interest rates, tightening liquidity conditions and oil prices leave no room for a few emerging markets
Monetary authorities in the euro zone, the United Kingdom, Canada and South Korea will also gradually tighten the political conditions to ensure macroeconomic stability, announced the rating society
or approached the standardization of monetary policy. Even if this could slow down if the risks of a decline in growth materialize, the statement added. will be used to continue the gradual monetary tightening in 2019, which, over time, will increase the burden on US interests and reduce the cost of debt.
The Reserve Bank of India (RBI) has brought to light similar problems in its October policy regarding the tightening of the policy rate. The central bank said the global and domestic financial conditions were tightening, which could curb the investment activity. The slowdown in world trade and the escalation of the tariff war could silence the winds of the recent depreciation of the rupee, RBI added.
After two successive rate hikes, the RBI Monetary Policy Committee kept its key rates unchanged October, citing a moderate inflation trajectory and a downward revision of inflation projections, although the attitude from neutral to a "calibrated tightening". RBI has increased the repo rate by 50 basis points until now in 2018 and said the rate cuts were irrelevant.
Bloomberg The data shows that the Indian rupee has depreciated by 12.55% against the dollar since the beginning of this year. Other currencies such as the Chilean peso and the Russian ruble fell 9.45% and 12.64%, respectively, during the same period. The most affected data were the Angolan kwanza and the Argentine peso, with respectively 45.6% and 47.7%.
Moody's also warned of the uncertainties surrounding the economic and fiscal reforms related to the upcoming elections in India, in the election of Jair Bolsonaro. in Brazil and political paralysis in Lebanon.
"The problems facing the German coalition government increasingly illustrate the fragmentation of consensus in Europe, which will hinder the national and political development of the euro area," he said.
The US economy would remain a key driver of global growth, but it would slow by more than half a percentage point as the effects of fiscal stimulus in 2018 diminish, he said. -he adds. Similarly, in the euro area, growth will slowly fall towards potential.
"The British economy slows down and faces new Brexit-related degradation risks. In China (stable in A1), even though we expect a moderate easing of fiscal policy to partially offset the impact of rising US tariffs, GDP growth (gross domestic product) will slow to 6% in 2019. "
The rating agency believes however that growth prospects for emerging markets are mixed.
"India and Indonesia are likely to experience near-trend growth despite internal and external challenges. In contrast, Argentina, Brazil and South Africa are facing below trend growth and we expect a strong recession in Turkey, "he said. 2019. For the advanced economies of the G-20, Moody's believes that growth should slow from 2.3 percent in 2019 to 1.9 percent in 2019, as in major economies, including the United States. and Germany.
"The slowdown in growth means that the window of global sovereign states to tackle persistent credit problems, including high levels of public and private debt, as well as long-term trends related to aging and to inequality, closes, "said Moody's.
He pointed out that high debt, falling growth and rising rates expose sovereign governments to the risk of shocks, and that several emerging and frontier markets are particularly vulnerable to the tightening of the global financial situation and the growing protectionism of the United States. ] Wed, Nov 7, 2018 12:17 pm EST
Source link
