Tags: emerging | markets | currency | Turkey

NYT: Emerging Markets Wrong to Blame Others for Currency Crises

By    |   Monday, 10 February 2014 09:07 AM

Officials in some emerging markets are unfairly blaming foreigners for the plunge of their nations' currencies, according to a New York Times editorial.

"Their anger is misplaced. There is no foreign conspiracy against the Argentine peso, the Turkish lira or other currencies that have fallen against the dollar," The Times editors write.

"The Federal Reserve's recent decisions to slow its bond-buying program have strengthened the dollar. But most of these currencies have declined primarily because of domestic problems."

Editor’s Note:
These 38 Dates Are Key to Bagging $313,038

In Argentina, for example, government policies helped inflation soar 28 percent in 2013, the editorial says.

In Turkey, the lira has dropped because Turkey's central bank took too long to raise interest rates, despite 7.4 percent inflation. The lira also has suffered from the Turkish government's corruption scandal.

"What leaders of developing countries ought to be doing now is addressing economic problems like inflation and corruption while investing in infrastructure and education," the editorial reads.

In the future, emerging markets could make themselves less vulnerable to flows of capital into and out of their countries by regulating those flows, the editorial says.

Meanwhile, the turmoil in emerging markets will have a negative impact on the U.S. economy, says Eswar Prasad, a Cornell University economist.

Emerging markets now account for about 40 percent of global GDP, and have taken up a bigger share of global growth since the 2008 financial crisis, he tells Yahoo.

"If that group of economies slows down, then the world is again going to be looking to the coattails of the U.S. to pull it along, and that's not so good for the U.S."

Editor’s Note: These 38 Dates Are Key to Bagging $313,038

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Officials in some emerging markets are unfairly blaming foreigners for the plunge of their nations' currencies, according to a New York Times editorial.
emerging,markets,currency,Turkey
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2014-07-10
Monday, 10 February 2014 09:07 AM
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