DMRE - Quantitative Easing In Emerging Market Economies

• The pandemic global financial shock has sparked the inclusion of QE as a policy tool also available for central banks of emerging market economies.
• QE targets are on the yield structures of interest rates. If there are fragilities leading to high basic, short-term interest rates, QE will not get much in terms of results.
• QE should not raise concerns about “fiscal dominance”, because otherwise it will be self-defeating. Capital outflow pressures may exacerbate.
• A prolonged stay of central banks as buyers in local currency bond markets may distort market dynamics.

For further details see: