Thursday, March 29, 2012

BRICS cite obstacles to growth set by debt struck West

"The world’s five largest emerging economies claim the West’s quantitative easing policy is destabilizing their own growth.Should the western cheap cash injection last too long, the developed countries themselves will suffer, experts are warning.
Brazil's President Dilma Roussefftold the fifth annual BRICS summit that while the developed world's monetary policy "brings enormous trade advantages to developed countries, it results in unfair obstacles for others".
The BRICS summit joint statement, signed by the leaders of Brazil, Russia, India, China and South Africa states that the enormous cash slush created by the west to deal with its debt crisis has "been spilling over into emerging economies, fostering excessive volatility in capital flows and commodity prices".
The US Fed, Bank of England and the ECB have injected trillions into their banking systems and cut their key interest rates to boost domestic economies. Lately the ECB alone provided for $1.3 trln in form of the 3-year loans at a very low interest rate, seeking to cool worries around the European money market. The benchmark US Fed rate has been varying within the bottom coring of0-0.25% for more than three years. The ECB rate stands at 1%, while the Bank of England's charges 0.5%.
“Since western countries gets cheap money, they seeks to invest it into the most precious things, which is today commodities,” Tamerlan Khasimikov, a general director at BST Capital Management, told Business RT, “BRICS have real cause for concern, as high demand in commodity driven economies makes them the major destination for foreign investors”

at http://rt.com/business/news/central-banks-monetary-policy-738/

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