Report
What accounts for the major change in the functioning of the international monetary system in 2014?
Until 2013, the functioning of the international monetary system was based on the accumulation of foreign exchange reserves by emerging and oil-exporting countries, which financed the US external deficit and prevented an excessive appreciation of emerging currencies against the dollar. Since 2014, the functioning of the international monetary system has become completely different: emerging and oil-exporting countries have been losing foreign exchange reserves, the US external deficit must be financed by private sector capital, emerging currencies have on average become weak against the dollar. What could account for this major change in the functioning of the international monetary system in 2014? Cyclically, the annou ncement of a more restrictive monetary policy in the United States; and the marked fall in the oil price; Structurally, growing concern about the economic situation of China and major emerging countries, which has reversed the direction of capital flows to these countries.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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