Experts weigh in on the effect of a potential interest rate expansion by the US Federal Reserve on a highly dollarised Cambodia
Anticipation of the US Federal Reserve’s interest rate hike in March is putting developing economies on edge, a recent blog post by the International Monetary Fund (IMF) stated.
Experts are predicting between two and four rate increases to quell an overheating US economy, aside from the central bank’s known plan to reduce the pace of purchase for treasury and mortgage-backed securities.
These monetary policies that the US Federal Reserve is implementing are aimed at keeping the US employment and inflation rate at two per cent in the long run, which was why it set the target range of the interest rate between zero and 0.25 per cent.
But inflation has “exceeded two per cent for some time”, it said last December.
In a note on January 9, Wall Street chief economist Jan Hatzius, who was quoted by CNBC,…