From India to Indonesia, emerging economies, currency and stock market, when the federal reserve will begin to shrink its monetary stimulus to keep interest rates at super-low speculation has upset the market development and investors to seek higher returns. In addition, the Asian economies have been investment star performers in the dump and now the ebb tide has triggered concerns, the region will be subject to the financial crisis of 1997-98 to run.
Q: why do investors fled Asia?
A: peeped out the fed's easy money policy is to have a sobering effect. Lure investors are back in the developed economies, such as the United States, where growth recovery, and the outlook for the Asian look less attractive, because after years of rapid expansion in China, transfer to a relatively low level. Pain is in India and Indonesia, investors flee has sent plunging currency, fan inflation threat and expand the current account deficit. The two governments have been forced to steps and measures, aimed at boosting confidence. Feeling hot is Malaysia's central bank this month cut 2013 growth forecast from 6% to 4.5 5%. In Thailand, the economy unexpectedly contracted in the second quarter.
Q: will there be a replay of the Asian financial crisis, some people are worried about?
Answer: in the late 1990 s, foreign sudden withdrawal from Thailand triggered a banking crisis and currency crisis. Infectious disease quickly spread to neighboring countries, Russia and Brazil's central bank governor, he worked frantically, stabilize the market. But this time, many analysts say the financial crisis is unlikely to explode into a full-fledged crisis, because Asian countries have better deal with a sudden change and investor sentiment. Singapore's DBS bank economic research director David said: "everyone is very worried that the fed tapering, carbon, refers to withdraw from the central bank's extraordinary stimulus." It is natural. In some cases, the fed will return to normal. This does not mean the end of Asia. "
Q: what's the difference between how is the situation?
A: many of Asia's emerging economies keep their currencies no longer fixed interest rates, so they don't install expensive speculators trying to belittle their defensive attack. In a failed attempt to prop up the Thai baht in 1997, spending billions of dollars in Thailand. Asian countries have accumulated large foreign exchange reserves, the central bank can use in case of an emergency. Even bother India has about $27 billion in foreign exchange reserves, the equivalent of about 5 months of imports, with less than the value of one month as early as 1990 years, India suffered compared to the balance of payments crisis, according to fitch, analysts said. Many people also run on its current-account surplus, which suggests that trade and investment income balance. In the 1990 s, many people appear deficit, this means that they need to borrow foreign funds, to maintain the operation of the economy and the banking system. The main exception is India and Indonesia today.
Q: what kind of trouble is to India?
A: the stock market has fallen by 10%, over the past three months, the rupee has lost its value against the dollar since the start of the year, the sixth. The government has introduced a new responsibilities, to import TV, increase gold tax, raise interest rates on deposits, to hit the capital outflow, but analysts said, these measures are a panic reaction, shows that the government lacks a coherent economic plan.
Q: how is the rupee weak company?
Answer: Indian companies and the government's encouragement, take out foreign currency loans now suffering. Company's low interest rates to borrow abroad, sometimes stops in the cash account home while central bank interest rates to fight inflation. The government's policy to allow automatic approval as much as $750 million in loans. These companies believe that currency cannot move on so quickly, "said abramovich scheck goenka, India's foreign consulting company founder and chief executive." But the way the market is always, you can't expect the market to move, the rupee fell. So most of these companies will have huge losses on the balance sheet. "



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