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The long shadow of the Fed’s rate hike on emerging Asia

Liquidity contraction, debt-servicing burden, and inflation are the key challenges

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    • In a new era of high and rising interest rates, emerging Asia may need to look to promising new industries -- such as virtual reality -- for growth opportunities.
    • In a new era of high and rising interest rates, emerging Asia may need to look to promising new industries -- such as virtual reality -- for growth opportunities. BLOOMBERG

    Xie Taojun and Liu Jingting

    Published Tue, Oct 18, 2022 · 05:50 AM

    THE US Federal Reserve raised benchmark interest rates by 0.75 percentage points in September – the highest increase in decades. Other countries followed suit. The Monetary Authority of Singapore announced its fifth straight monetary policy tightening to curb inflation on Friday (Oct 14).

    Recently, the United Nations warned against the risk of a recession induced by excessive monetary tightening.

    How has the US monetary policy stance evolved and why may other countries worry about US rate hikes? The impacts on emerging economies are particularly relevant for Asia.

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    US Federal ReserveInterest ratesGlobal economyEmerging marketsInflation

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