Central bankers from around the world are suggesting that they are ready for a US interest rate hike and that they would prefer that the Federal Reserve make the move without further ado, Reuters reported.
“If the Fed tightens, it will be due to the fact that they have a perception that inflation is drifting up, but more important that unemployment is falling and the economy is recovering,” Bank of Mexico Governor Agustin Carstens was quoted as saying in an interview.
“For us, that is very good news.”
A senior South Korean policymaker echoed that sentiment.
“A lift at an already expected timing would be better in a sense that it clears up one of the big uncertainties over the issue and it would mean the US economic recovery is deemed sustainable,” the official told Reuters, speaking on condition of anonymity.
At a central bankers’ conference in Jackson Hole last week, other top global policymakers also indicated that financial markets globally are as ready as they can be to a Fed tightening.
“It’s a long anticipated event,” Reserve Bank of India Governor Raghuram Rajan was quoted as saying on a conference panel, sitting alongside Fed Vice Chairman Stanley Fischer.
“It has to happen some time – everybody knows it has to happen – but pick your time.”
While Yao Yudong, head of the People’s Bank of China Research Institute of Finance and Banking, last week blamed the Fed for the market turmoil and said a US hike should be delayed, most central bankers from emerging markets contacted by Reuters said it will be better if the Fed gets going.
“The more certainty there is, the better,” Bank Indonesia Senior Deputy Governor Mirza Adityaswara was quoted as saying in Jakarta.
“For emerging markets, the smaller economies, they’re often looking for a weaker currency. So from their perspective a tightening move by the Fed might be helpful to weaken their currency and help them do what they want to do,” St. Louis Fed President James Bullard said.
– Contact us at [email protected]