There are two important challenges I would like to address: the current global environment for emerging markets (Ems), and the recent difficulties of central banks around the world to reach their targets in the short term.
The global economy is in a transition to a new ‘steady state’. Currently, the combination of abundant liquidity and slow recovery in growth among major economies constitutes, from the perspective of EMs, a truly ‘benign interregnum’. It is benign because abundant global liquidity in a scenario of zero interest rates has enabled cheaper funding for EMs.
