Swiss give scary lesson on central banks’ limits

January 15, 2015

The monetary authorities are expected to control inflation, deflation, growth and the financial system. But the Swiss National Bank, an above-average institution, has managed to mess up badly by breaking its word. Others may not do much better.

China on the horns of a volatility dilemma

December 10, 2014

Gyrating stock markets are a reminder that motion matters as much as prices. China has encouraged swings in some areas, like the currency, while trying to control them in others like house prices and employment. It’s a losing battle. Volatility affects behaviour, and is catching.

Bitcoin mania heads into the end game

By Edward Hadas
December 18, 2013

The electronic pseudo-currency had a good run. Ideologues, speculators and scammers enjoyed it while it lasted. Now Chinese authorities are determined on a strict clamp down, maybe an outright ban. Common sense prevails. Bitcoin’s price is down 50 pct. It will fall much more.

Fed liquidity curbs will act as Asia’s detox plan

August 22, 2013

Asia’s sliding trade surpluses were making it increasingly reliant on cheap foreign debt. Higher U.S. interest rates will cure the craving. Though markets may be turbulent, costlier local money or cheaper currencies will improve the trade balance for most countries in the region.

Indonesia imitates India’s costly growth obsession

August 16, 2013

The central bank has missed an opportunity to raise interest rates. The authorities risk a weaker currency, runaway inflation and financial instability if they chase growth while a stubborn current account deficit lingers. Jakarta is at risk of emulating New Delhi’s folly.

India’s rupee rescue is more prayer than plan

August 8, 2013

The defence of the falling currency is three-pronged: reluctantly shore up interest rates, squeeze gold imports and score some quick export gains. But officials are clutching at straws. There is no easy way to finance India’s large trade gap, nor a painless way to lower it.

How Raghuram Rajan can end India’s mini-crisis

August 7, 2013

The former IMF chief economist warned of the credit bubble in 2005. Now he must show he can manage crises as well as he can predict them. The current strategy for ending the rupee’s free fall will choke growth. As India’s next central bank chief, Rajan will need to switch gears.

Ailing South Korea needs monetary remedy

May 3, 2013

A weak Japanese yen is hurting Korean firms’ earnings, while anaemic global demand crimps export volumes. Debt-laden households hold out little hope for the economy. The central bank’s reluctance to cut interest rates and head off deflation risk may turn out to be a blunder.

Return to glory days may elude Japan’s automakers

April 24, 2013

The falling yen will boost earnings and market share. But compared to 2006, Japan ships fewer cars abroad, margins are narrower, and U.S. rivals are no longer in a mess. Toyota’s market value is unlikely to overtake that of its eight main western competitors combined again.

IMF crowd should cut Japan some slack

April 19, 2013

Prime Minister Shinzo Abe’s economic policies are in for a drubbing at the fund’s spring meeting. IMF officials bemoan Japan’s “risky” fiscal stimulus while America grumbles about the yen. But Japan, which is one of the IMF’s staunchest supporters, was right to act.