Dublin has left banks do anything EnglishWith a constant a message custom and polishedBranches need to have a broader radar visionThere was also an obvious error of timingIt is one of the most dynamic sectors of the EditionThe result of the vote fell in the eveningThe policy of site is fundamental in our strategyThe investigation should last several monthsIt should except surprise throw the spongeObjective to seven times better than average Swedish householdFor decades, flows of capital in the direction of the emerging countries follow a movement of yo-yo. Last year, the phenomenon has occurred with the massive influx of capital, securities and investment in fixed income emerging markets, assumed to have good basic macroeconomic, financial and political.
Real tsunami is short-term cyclical factors: interest rate differentials and a flood of liquidity for assets with high performance, because rates of interest almost zero and the pursuit of monetary relaxation measures that reduce opportunities in developed countries the atrophied savings. But secular factors are also involved: the growth differential between emerging and developed countries, the increasing tendency of investors to expand their activities to new markets and the expectation of the appreciation in the long term of the currencies of emerging countries (in nominal terms and in real terms).
In the light of these elements, the key issue in developing countries is to know how to face the capital flows, which will inevitably push to increase their currency and threaten their exports, which are the engine of growth.
The first solution is to do nothing and let their currency appreciate. It might be a good choice if the capital inflows and pressure on their currency to the fundamental factors (a significant and persistent surplus of current accounts, an undervalued currency, a growth differential). But the arrival of capital is often short term factors, irrational exuberance or a passing fad, which can lead to an overvaluation of the currency. This problem is exacerbated by the world's leading exporter, China, is aggressively to limit any appreciation of the renminbi. If it does not policy change, other emerging markets are likely to align it to not to lose competitiveness.
Allow a currency to appreciate at a cost. Also a second solution is to intervene on the exchange rate by selling reserves. This enables to contain but feeds to beast, the rate of change, � bête, du taux de change, pression la hausse pressure la hausse increase du du la la the la cela permet de contenir mais nourrit � bête, du taux de change, pression la hausse du la mais hausse du la hausse mais increase du du la hausse la hausse la la hausse hausse The result is inflation and increase excessive credit, which could result from dangerous asset bubbles.
A third solution is to reduce the budget deficit to push down the high interest rates attract capital. But because of the improvement of the external balance and the decrease of sovereign risk, remediated fiscal policy may attract capital.
Also available in an intervention on a large scale to accumulate foreign assets necessary to compensate for the effects of the entry to long-term capital on the value of the currency. The advantage of this solution is to act on long-term factors play an important role in the arrival of the capital, at a time when investors from developed countries realize that they are not in a good position in terms of assets in emerging markets and they reduce their portfolio of domestic values. In General, do not systematically prevent the appreciation of the currency. When it is justified by economic fundamentals, it is preferable to leave the exchange rate rise gradually. But if the appreciation of a currency is due to a flow of capital resulting from the will of diversification of investors in developed countries, developing countries can and must resist.
