Business Maverick: Stimulus Addiction Grows as Risk in Emerging Markets

Once the coronavirus pandemic is over, governments are going to struggle to wean themselves off the loose fiscal and monetary policies that have averted economic collapse, said David Hauner, a London-based strategist at Bank of America Corp. That risks reviving inflation, weakening currencies and undermining bonds.

For now, the coronavirus pandemic has slashed consumer demand and investment and pushed inflation to a record low in Brazil and a six-year low in Colombia. Across emerging markets inflation is moribund, allowing governments to ramp up spending and central banks to provide the liquidity markets need. The longer it goes on though, the harder it will be for policy makers to turn off the tap.

In the next six to 12 months, South Africa’s rand may be among the most at risk given lower policy rates, underlying vulnerabilities and the central bank’s quantitative-easing program, said Brendan McKenna, a foreign-exchange strategist at Wells Fargo Securities in New York. Brazil’s currency may also come under pressure as policy makers become increasingly likely to embark on a bond-buying program, he said.

España Últimas Noticias, España Titulares

Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.

Business Maverick: U.S. Futures Swing With Yuan on China Trade Worry: Markets WrapU.S. futures swung wildly with the yuan after a Trump administration official described the Sino-American trade deal as “over” before later saying that that remark was not as it seemed.
Fuente: dailymaverick - 🏆 3. / 84 Leer más »

Business for SA warns SA will need foreign capital to fund budgetFunds raised outside the domestic market significantly heighten risk of a sovereign debt crisis
Fuente: BDliveSA - 🏆 12. / 63 Leer más »

Business for SA warns SA will need foreign capital to fund budgetFunds raised outside the domestic market significantly heighten risk of a sovereign debt crisis
Fuente: BDliveSA - 🏆 12. / 63 Leer más »

Business Maverick: Schwarzman Sees ‘Big V’ Economic Rebound in Next Few MonthsSteve Schwarzman, chief executive officer of Blackstone Group Inc., said the economy is likely to benefit from a V-type recovery in the next few months.
Fuente: dailymaverick - 🏆 3. / 84 Leer más »

Business Maverick: South Africa Looks to Green Infrastructure Bond to Spur GrowthSouth Africa’s government is considering selling a green infrastructure bond worth tens of billions of rand as part of its biggest drive ever to kickstart private investment in projects ranging from energy to water reticulation.
Fuente: dailymaverick - 🏆 3. / 84 Leer más »