WASHINGTON, April 25 (Xinhua/APP) –:The U.S. Federal Reserve’s action to raise interest rate faster than expected would lead to financial “complexities” for Asia economies, especially those with debt in foreign currency, an International Monetary Fund (IMF) official said Monday evening.
“Monetary tightening in advanced economies,” among other things, is leading to higher interest rates in Asia, “placing a further drag on growth,” Gulde-Wolf told reporters.
There are various channels that Fed rate hikes could impact Asia, according to the IMF official. “The first one is the trade channel, which could actually be positive”: appreciating U.S. dollar leads to higher demand and more exports from Asia to the United States, she said.
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