Photo: Links International Journal
Just think for a moment about the screwy times we live in when central banks are trying to hurt their rivals by buying up their rivals’ bonds — essentially lending them money.Such is the state of things in a world where every country wants to weaken their currencies to boost their own exporters.
Dealers said central banks in South Korea, India, Malaysia, Taiwan, the Philippines and Singapore were all suspected of being active in the currency markets.
However, there was no suggestion that Wednesday’s action by the region’s central banks was co-ordinated, merely a unilateral response by policy-makers to the weakening dollar. But analysts said the trend was set to intensify.
“Just look at how many central banks intervened,” said Maurice Pomery of Strategic Alpha. “If central banks adopt a policy to buy their neighbours’ bonds to keep them less competitive, all hell could break loose.
Business Insider Emails & Alerts
Site highlights each day to your inbox.