Central bankers from developing countries
Central bankers from developing countries urged the US Federal Reserve to raise basic rather to terminate the uncertainty about Fed policy, which hovers over markets in recent weeks.
Uncertainty leads to chaos
“We believe that people who determine monetary policy in the US do not know what to do. This uncertainty breeds chaos,” says Mirza Adityasvara, deputy governor of the Bank of Indonesia, quoted by the Financial Times.
“The situation will resolve itself as soon as the Fed decision and then give market expectations it will raise the interest rate one or two times and then stop.”
His comments contrasted with the views of the World Bank that a possible lifting of the US base rate for the first time since 2006 can destabilize emerging markets. Worries about Fed policy together with the slowdown in China’s economy and the collapse of commodity prices will hit emerging markets in the coming months. This is expected to cause the collapse of their stock exchanges, where they will move out huge capital, according to the World Bank.