WDR 2022 Video | Chatib Basri: Former Minister of Finance of Indonesia

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00:10 Finance can help to promote an equitable recovery from the pandemic

00:13 by devising an appropriate exit strategy from economic stimulus.

00:17 The 2013 temper tantrum traumatized emerging economies.

00:21 What will happen

00:22 if the United States normalizes its monetary policy?

00:25 The 2013 temper tantrum demonstrated that tapering talks resulted

00:29 in capital outflows from emerging economies to advanced economies.

00:32 A significant increase in the Fed fund rate,

00:34 for example,

00:36 can put emerging market central banks in a dilemma.

00:39 On the one hand,

00:39 if they do not follow the Fed and.

00:42 Rate,

00:42 the exchange rate will depreciate.

00:44 On the other hand,

00:45 as interest rates rise,

00:47 the risk of NPLs rises,

00:49 potentially disrupting economic recovery.

00:51 In this context,

00:53 a policy mix that addresses interest rate,

00:55 exchange rate,

00:56 and macroprudential policy is critical.

00:58 The exit strategy must be done at the appropriate time,

01:02 well communicated

01:03 and carefully executed.

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Finance can help to promote an equitable recovery from the pandemic by devising an appropriate exit strategy from economic stimulus. The 2013 temper tantrum traumatized emerging economies. What will happen if the United States normalizes its monetary policy? The 2013 temper tantrum demonstrated that tapering talks resulted in capital outflows from emerging economies to advanced economies. A significant increase in the Fed fund rate, for example, can put emerging market central banks in a dilemma. On the one hand, if they do not follow the Fed and. Rate, the exchange rate will depreciate. On the other hand, as interest rates rise, the risk of NPLs rises, potentially disrupting economic recovery. In this context, a policy mix that addresses interest rate, exchange rate, and macroprudential policy is critical. The exit strategy must be done at the appropriate time, well communicated and carefully executed.

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worldbank/WDR2022_TPV_ChatibBasri_Draft01

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WDR2022 TPV ChatibBasri Draft01

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WDR2022 TPV ChatibBasri Draft01

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