Global Impact of Rate Rise by Fed Bank of U.S.A.

16 December 2016 | 989 Views | By Mint2Save

It was speculated and expected long before it came as formal / official declaration by Fed bank of U.S.A hike in the rates of lending on Dec., 15,016 by 25 bps.

The immediate out come is gauged as increase in dollar index and gleam on the faces who are exporters to U.S.A. and gloom on the faces of importers receiving and making payments in U.S. dollars. The countries who are major exporters or importers may find a radical change in their economy and budgetary provisions accordingly. Their share market may face a downward trend as FII s may check their investing hands watching the further developments cautiously. Even in India the share market exhibited volatility and may take some time in getting stabilised. Over all, asian markets shown the almost same downward trend. But, on the contrary, the european markets presented unaffected or upward trend. The real or more trust worthy picture shall come up after a few days in the next week.

In long run, as has been speculated by a many that the hike trend by Fed. bank of U.S.A. may continue further, may affect the next budget of India and Asian nations, in near future. This means, that the financial growth,dearness, economic planing, tax structure and other related matters may exhibit positive or negative results, as the case may be, depending upon the steps / measures taken by the governments of affected nations. This picture shall become explicitly clear by the first or second week of Jan., 017, specially in the case our country India. The net result shall be worth watching while coupling the action of the Fed. bank of U.S.A. with demonetisation of certain currency in India. The working of Private and Public sector Banks may find it hard to cope up with radical and drastic changes that may surface then. Other major central banks may have to make some changes in its policies to cope up with needs of common man coupled with requirements of Industrial and Commercial sector including small and large business persons or corporates/groups. The exporters and importers have to be handled with care, caution with adequate steps to bring forth normalcy. This is true for not only China but is applicable to all asian countries. A sharp and cautious watchful eye have to constantly kept on all affairs related to Chinese economic policy, trade trend and policy changes brought in by china under these circumstances.

If all the developments like demonetisation, decision to keep rates unchanged and well speculated hike in rates by the Fed. bank of U.S.A. are taken into consideration in a cumulative manner then, it can be inferred /concluded that the Indian economy shall enjoy a positive and the grievances of the common man and industrial and commercial sects. shall be no more and the pace of economic and financial development shall see a radical high, may be, we may attain a better G.D.P. and all round economic growth.

What are your thoughts on the Fed Hike? Is it going to fetch good results? Are we going to see the much awaited international business now?