As currencies weaken, Asia’s original sinners go for classic defence

Reuters/Vidya Ranganathan/5-4-2018

“Intervening by buying and selling currencies has been the default policy option since the 1997/98 financial crisis for Asia’s governments. Even now, rather than raise interest rates in lockstep with the Federal Reserve, they are selling dollars and supplanting the easy money that global central banks are slowly removing from the world economy.  A big part of the reason has been the historic and high dependence on foreign portfolio flows, often referred to as the ‘original sin’ in the markets.”

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