Just as they thought they could begin moving away from crisis mode, China's turmoil has become a new threat to the world's top central bankers. The China crisis will be an ominous cloud over the annual gathering of US and foreign central bank officials and experts beginning Thursday in Jackson Hole, Wyoming.
Beijing's deepening economic problems have sent share markets tumbling and shaken currency markets around the globe The country's apparent spending of hundreds of billions of dollars in reserves to support its yuan currency, after a modest early-August devaluation, ominously suggests more coming depreciation for the yuan that will batter other emerging-market currencies and send the dollar higher, possibly slowing growth in the US economy. The most immediate challenge is for the host at Jackson Hole, the Federal Reserve. Before Beijing sent markets into free-fall with its surprise August 11 devaluation of the yuan, by 2.8 percent versus the dollar, the Fed was on a path toward raising interest rates for the first time in more than nine years.
Comments
Comments are closed.