Despite various measures aimed at the monetary policy easing, the world’s central banks failed to push down their national currencies.
In the end of January, the Bank of Japan adopted negative deposit rate. However, since the beginning of the year, the Japanese yen has advanced by 8% against the US dollar hitting the highest level last seen in October 2014.
The European Central Bank has also made an attempt to weaken the euro. Last week, the regulator cut three of its key rates and expanded the quantitative easing program. Nevertheless, the euro gained 4.2% against the US dollar.
On Thursday, March 17th, Norway’s central bank cut its main interest rate to a record low of 0.5% and did not rule out a possibility of negative rates. Despite all the attempts, the Norwegian crown climbed by 1.6% against the US dollar and rose by 0.8% against the euro.
Experts suppose that markets’ unexpected reaction to the actions of the world’s central banks has a negative effect on demand for risky assets such as emerging markets and commodities.
Besides, experts underscored a possibility of long-term risks to global growth. All central banks are using new tools to weaken their currencies and boost competitiveness of their exports. However, there are no results as they follow the same approach.
