In The News

Quartz: Crisis in Emerging Market Currencies

Eshe Nelson September 3, 2018
Currency worries are not unusual for emerging economies. As currencies decline in value, investors may withdraw, and exchange with other currencies can become difficult; the countries struggle to make payments especially on debt in more costly US dollars. “What began in Argentina and Turkey has snowballed into broader collapse in confidence that has policy makers in Indonesia, India, South Africa...

China-US Focus: US Miscalculation on a Chinese Debt Crisis

Vasilis Trigkas and Qian Feng August 30, 2018
US leaders may misunderstand Chinese economic fundamentals by assuming that a trade war will trigger a debt crisis that threatens China’s government. Vasilis Trigkas and Qian Feng of Tsinghua University point to three China-specific economic characteristics that could prevent an economic crash. The Chinese Communist Party controls the nation’s information infrastructure which gives regulators...

Project Syndicate: Strong Dollar Weakness

Benjamin J. Cohen August 24, 2018
The US dollar gained more than 8 percent value for the year and shows no sign of slowing. US officials credit growing business confidence, but Benjamin Cohen, writing for Project Syndicate, credits rising interest rates for increased dollar demand. The rising dollar makes US exports more expensive, and new tariffs make imports more expensive, adding to inflation and prompting the US Federal...

Wall Street Journal: Turkish Lira Crisis Hammers Emerging Markets

Georgi Kantchev and Yeliz Candemir August 14, 2018
Some emerging economies relied too much on low-cost borrowing available after major economies increased liquidity after the 2008 debt crisis. Value of the Turkish lira is falling, and the country struggles to boost liquidity by reducing its banks’ reserve requirements while resisting an increase in its own interest rates. “Turkey has become a primary cause for concerns on global financial markets...

Quartz: Indian Rupee Falling

Nupur Anand August 13, 2018
The US trade war, a US dollar rising in value and the end to low-cost borrowing are prompting emerging market currencies to plunge in value: “Already, higher crude oil prices, a widening trade deficit, and the exit of foreign investors from India have shaved off over 8% from the rupee’s value this year,” reports Nupur Anand for Quartz. “Turkey has been in a rough patch this year, with its...

Financial Times: Turkish Lira Plunges as Trump Threatens Tariffs

Ayla Jean Yackley and Demetri Sevastopulo August 10, 2018
Turkey’s currency is falling against the dollar even as the US president threatens more tariffs – 20 percent on aluminum and 50 percent on steel. Turkey’s president calls the actions “economic war.” Turkey, like the United States, is among the top 10 countries that produce steel. The lira’s fall “ricocheted into Turkey’s bond market, sending the yield on the local currency 10-year bond above 20...

Financial Times: Trade War Escalation Rattles Global Stocks

Joe Rennison, Pan Kwan Yuk and Gabriel Wildau July 12, 2018
The United States announced additional tariffs worth $200 billion on Chinese imports, and retaliation is anticipated from China. US tariffs would cover nearly half of Chinese imports. Global stock markets, especially chipmaker, industrial and mining sectors, are in decline. “The escalating trade war is adding to downward pressure on China’s economy from a slowdown in infrastructure investment and...