Subject: "Economists: Prepare for US monetary reversal"
Author: The Wise OneDate: 17 Sep 2008
Economists: Prepare for US monetary reversal
(Xinhua)
Updated: 2008-07-01 18:54
BEIJING -- Economists are warning policy makers in China to prepare for
a reversal in US monetary policy to tightening during the second half of
2008.
Market analysts said they expected the US Federal Reserve Board to raise
interest rates in the second half of the year, as inflation risks began
to outweigh recession fears in the world's largest economy.
An expected strengthening of the US dollar following such a rate hike
would divert speculative funds ("hot money") from emerging markets to
the United States, increase the burden on countries with heavy foreign
debts, and cause a regional economic crisis, He Fan, an economist at the
Chinese Academy of Social Sciences (CASS), said in a report released on
Tuesday.
China, with hundreds of billions of US dollars in "hot money" that had
already poured into the country, should closely watch the adjustment of
US monetary policy and take much stricter measures to monitor capital
flows in the meantime, said He.
"Hot money" outflows alone would not be so worrisome; it was the tight
money supply that would follow the outflow that was of concern, said
CASS economist Zhang Ming.
China's policy makers should closely monitor the situation and make
timely adjustments to monetary policy, said Zhang.
The anticipated US monetary policy shift was also likely to cause price
falls of dollar-denominated commodities such as grain and crude oil,
which would help ease China's steep inflation, according to professor
Huo Deming of the China Center for Economic Research at Peking University.
http://www.chinadaily.com.cn/china/2008-07/01/content_6810901.htm
| "Economists: Prepare for US monetary reversal" |
| 17 Sep 2008 | The Wise One |
| 18 Sep 2008 |  Greg |
