daniel chigunwe
A tug-of-war is developing between investors and policymakers in emerging economies: markets keep dumping assets on concerns of growing risks, prompting authorities to wade in with one-off support measures aimed at stemming the sell-off.
China’s yuan extended its losses for a fourth day and erased all of its post-reopening gains even after authorities cut a key interest rate and began considering a stamp-duty reduction for stock trades.
But data releases offered further evidence of a failed economic recovery, leaving investors craving for a big bazooka of stimulus rather than half-hearted darts thrown in the dark.
Russia witnessed the same reactions. After rallying as much as 5 percent before the central bank’s emergency meeting, the ruble erased its gains even though governor Elvira Nabiullina delivered a robust interest rate hike of 350 basis points.
The currency broke below the 100-per-dollar mark on Monday as the country struggles with the economic fallout of Western sanctions.
Russia witnessed the same reactions. After rallying as much as 5 percent before the central bank’s emergency meeting, the ruble erased its gains even though governor Elvira Nabiullina delivered a robust interest rate hike of 350 basis points.
The currency broke below the 100-per-dollar mark on Monday as the country struggles with the economic fallout of Western sanctions. — Bloomberg
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