Dollar lending in East Asia can override local monetary policy, says BIS' McCauley
Low interest rates in major advanced economies can override local monetary policy in emerging economies where firms choose to borrow in foreign currency, according to new research by Robert McCauley of the BIS and Dong He of the Hong Kong Monetary Authority (HKMA).
The paper, published today by the Bank for International Settlements (BIS), analyses the transmission of major economies' monetary policy to East Asia, and presents results suggesting the emergence of "rapidly growing" foreign
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