FRANKFURT—A mix of weaker growth in China, the U.S. dollar's rise in value and high levels of dollar-denominated corporate borrowing pose a risk to emerging markets, the Bank for International Settlements warned in a report issued Sunday that highlighted many trouble spots for the global economy.
"We are not seeing isolated tremors, but the release of pressure that has gradually accumulated over the years along major fault lines," said BIS chief economist Claudio Borio.
Financial markets have swung wildly in recent weeks, due in part to a decision by China last month to devalue its currency. This raised fears that the world's second-largest economy had lost momentum, threatening an already tepid global economic recovery. Uncertainty over the timing of future interest-rate increases by the U.S. Federal Reserve has added to the volatility in markets.
Read more: http://www.nasdaq.com/article/bis-highlights-trouble-spots-for-global-economy-20150913-00010#ixzz3lkvvJ5MM
"China's economic slowdown and the U.S. dollar's appreciation have confronted [emerging-market economies] with a double challenge: growth prospects have weakened, especially for commodity exporters, and the burden of dollar- denominated debt has risen in local currency terms," the Switzerland-based consortium of central banks said in its quarterly report.
Financial markets have swung wildly in recent weeks, due in part to a decision by China last month to devalue its currency. This raised fears that the world's second-largest economy had lost momentum, threatening an already tepid global economic recovery. Uncertainty over the timing of future interest-rate increases by the U.S. Federal Reserve has added to the volatility in markets.
Read more: http://www.nasdaq.com/article/bis-highlights-trouble-spots-for-global-economy-20150913-00010#ixzz3lkvvJ5MM
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