Central bankers change direction

Dünya Executive - - REPORT - Murat BASBOGA

In the world of finance, central bankers run the game. After the global recession of 2008, they flushed the mar- kets with huge sums of money to ease the burden on financial institutio­ns, lenders and even corporatio­ns. But last week, the heads of the U.S. Federal Reserve, the European Central Bank (ECB) and the Bank of England changed the rules: Rising interest rates are on their way.

As companies became addicted to zero rates, and sometimes less than zero, a raise in interest rates will affect every institutio­n in the corporate world. ECB President Mario Draghi signalled a gradual exit from expansiona­ry monetary policy in a speech at a central banking forum in Sintra, Portugal. Any change in the ECB’s policy settings increases the chances of a follow-on move by Denmark’s DNB, Sweden’s Riksbank and the Swiss National bank.

The result is a fairly dramatic change in the parameters governing the G10 forex market, which has fed a dramatic turnaround in sentiment regarding the dollar. Also, Bank of England Governor Mark Carney spoke about the considerat­ion of a gradual rate rise in coming months. Here are analysts’ responses to the changing environmen­t in the monetary policy of the G10.

Newspapers in English

Newspapers from Turkey

© PressReader. All rights reserved.