What the Fed Rate Rise Means for Corporate Debt in Emerging Markets

2019-03-26T13:38:19-04:00January 9, 2017|

By Adrian Alter and Selim Elekdag

Versions in عربي (Arabic), and Español (Spanish)

In December 2016, the U.S. Fed raised interest rates for the first time in a year, and said they planned more increases in 2017.  Emerging market currencies took a bit of a dive, but overall investors didn’t overreact and run for the doors with their money.  For the bigger picture, you can read IMF Chief Economist Maurice Obstfeld’s blog that outlines how the U.S. election and Fed decision will impact the global economy.  […]

Emerging Market Corporate Debt in Foreign Currencies

2019-03-27T15:02:44-04:00October 1, 2015|

By Selim Elekdag and Gaston Gelos

Debt held by firms in emerging market economies in a currency other than their own poses extra complications these days. When the U.S. Fed does eventually raise interest rates, the accompanying further strengthening of the U.S. dollar will mean an emerging market’s own currency will depreciate against the higher value of the U.S. dollar, and would make it increasingly difficult for firms to service their foreign currency-denominated debts if they have not been properly hedged.

In the latest Global Financial Stability Report, we find that firms in emerging markets that […]

Metals and Oil: A Tale of Two Commodities

2019-03-27T15:13:25-04:00September 14, 2015|

By Rabah Arezki and Akito Matsumoto

(Version in Español)

“It was the best of times, it was the worst of times.” With these words Charles Dickens opens his novel “A Tale of Two Cities”. Winners and losers in a “tale of two commodities” may one day look back with similar reflections, as prices of metals and oil have seen some seismic shifts in recent weeks, months and years.

This blog seeks to explain how demand — but also supply and financial market conditions — are affecting metals prices. We will show some contrast with oil, where supply […]

Whack-A-Mole in China’s Bubbly Housing Market

2017-04-15T14:19:35-04:00August 9, 2011|

Ultimately, the solution has to involve higher interest rates (on both deposits and loans), efforts to create a broader set of financial assets for the population to invest in, and a broad-based property tax that covers the majority of China’s housing stock.

Reigniting Growth in Emerging Europe

2017-04-15T14:40:37-04:00February 10, 2010|

Following the global economic crisis, Europe's emerging economies will need to find new sources of growth to increase their share of world markets. Marek Belka, head of the IMF's European Department, says growth will need to come from manufacturing and services, rather than, in the past, construction, real estate, and banking. But he argues that Emerging Europe has transformed itself many times before and is quite capable of doing it again.
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