Talk of the Federal Reserve’s first rate increase in almost a decade tends to send many investors into a frenzy. For the world’s central bankers, it is increasingly likely to elicit sighs of resignation.
Fed fatigue has enveloped emerging-market officials facing repeated bouts of volatility in their currencies and capital flows alongside mounting worries about debt. Some policy makers, gripped by the uncertainty, delivered a message to their American counterparts as officials gathered in the Peruvian capital for the International Monetary Fund’s annual meeting: Please stop dithering.
“Delaying the increase would not solve the situation,” said Sukhdave Singh, deputy governor of Bank Negara Malaysia. “If it is a case that the emerging markets have taken on too much debt, there will be a day of reckoning. Delaying an interest-rate hike does not necessarily address that issue.”
Fed fears have consumed emerging economies for the past two years after an unprecedented stretch of U.S. monetary stimulus. But many officials at the IMF meeting, which ended Sunday, said they would prefer certainty now over the prolonged agony of waiting.
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