Mexican Central Bank Head Warns of Spillover Effects of Dramatic Monetary Policies - WS... - 0 views
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SINTRA, Portugal—The head of Mexico's central bank said Tuesday that he supports the dramatic measures that central bankers in advanced economies have taken to stabilize their economies, but emerging markets must be mindful of the spillover effects these policies may have.
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"The unconventional monetary policies have…established the ground for a recovery in economic activity," said Agustin Carstens, governor of Mexico's central bank
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The inflows have led to higher exchange rates in emerging markets, Mr. Carstens said, weakening exports, as well as a compression of interest rates, leading to bubbles in some real-estate markets.
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Agustin Carstens, governor of the Central Bank of Mexico warns about the spillover affects into the developing world from advanced economies' banks' monetary policies. Money has found its way into emerging markets leading to higher exchange rates and weakening exports according to Carstens. This is a dangerous bubble that could be liable to burst should growth pick up soon. Overall this article provides an interesting insight into how one countries policy choices can have global consequences and how international economics really is.