EMEs’ rising reserves increase global volatility – NBER study

Emerging economies’ accumulation of foreign assets has depressed global interest rate

Geopolitics-impacts-reserves

If one country accumulates foreign reserves, this will strengthen its financial stability; but if many countries do it, it is likely to have a negative impact on global economic stability, new research shows.

The study, by US non-profit organisation the National Bureau of Economic Research, found that surging reserves in emerging market economies (EMEs) had contributed to an overall decline in global interest rates since 1991. These countries mainly took on short-term public debt issued by

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