One perspective on what's good and bad about the extensive monetary easing by CF40 Senior Fellow Zhang Bin, and CF40 research fellows Zhang Jiajia and Zhong Yi: mp.weixin.qq.com/s/DfLFMg2Wxan4…
Monetary easing has stabilized the global financial market and bolstered up economic recovery.
Timely and targeted easing measures have added to liquidities in the market, sustained businesses and employment by channeling loans to enterprises and households, mitigated impacts of world economic downturn and sluggish demands for global trade, and spurred economic recovery.
However, the extensive easing has had negative impacts on the capital flows and exports of emerging markets. It has steered excessive liquidities toward emerging markets, placing on them much pressure of currency appreciation, capital price hike and leveraging up.
After #COVID19 is brought under control and the global economy returns to normal, developed economies will gradually terminate #QE measures. But that will leave #emergingmarkets under strains of #capital outflow, #currency depreciation, #asset price fall and passive deleveraging.
The huge capital inflow will destabilize the economy of emerging markets, and the drastic swings in #exchangerates will also disrupt their exports.
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