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Asserting that it is very important that emerging markets grow and are prosperous, a top US official has acknowledged that the American economic policies does have an impact on the emerging markets.
“It is true that changes in longer-term interest rates in the United States, but also in other advanced economies, does have some effect on emerging markets, particularly those who are trying to peg their exchange rate and can lead to some capital inflows or outflows, but there are also other factors that affect inflows and outflows,” the Federal Reserve Board Chairman, Ben Bernanke, told reporters at a news conference here.
“Those include changes in risk preference by investors, changes in growth expectations, different perceptions of institutional strength within emerging markets across different countries.
So there are a lot of factors that are there playing a role, and that’s one reason why different emerging markets have had different experiences.
They have different institutional structures and different policies,” he said.
Bernanke was responding to a question on the emerging market economies blaming the US for their current economic distress.
“We think it’s very important that emerging markets grow and are prosperous.
We play close attention to what’s happening in those — in those countries. It affects the United States,” he noted.
“The main point I guess I would end with though is that — what we’re trying to do with our monetary policy here, as I think my colleagues in the emerging markets recognise, is trying to create a stronger US economy.
A stronger US economy is one of the most important things that could happen to help the economies of emerging markets,” he said.
“I think my colleagues in many of the emerging markets appreciate that, notwithstanding some of the effects that they may have felt, that efforts to strengthen the US economy and other advanced economies in Europe and elsewhere ultimately rebounds to the benefit of the global economy, including emerging markets as well,” Bernanke said.
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