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Fed's policy stance will cause turbulence, disorder from strong dollar - Xinhua
December 15, 2016 / 8:19 AM / a year ago

Fed's policy stance will cause turbulence, disorder from strong dollar - Xinhua

SHANGHAI (Reuters) - The U.S. Federal Reserve’s decision to raise interest rates will stoke fresh financial turbulence, and global “disorder” is in store as the dollar strengthens from an accelerated pace of rate hikes, China’s state news agency Xinhua said in a commentary.

A security guard walks in front of an image of the Federal Reserve in Washington, DC, U.S., March 16, 2016. REUTERS/Kevin Lamarque/File Photo

“The Fed’s rate hike will inevitably cause fresh financial turbulence, and worsen the situation of those countries that overly depends on external financing and are insufficiently capable of paying (off) debt, especially those emerging markets,” Xinhua said on Thursday.

“If the United States accelerates its rate hike pace in the future, a stronger dollar would bring disorder worldwide” because different countries have different interest rates, it said.

The commentary added that it was “questionable whether the U.S. economy itself has the capability to sustain the possible fast-pace rate hikes indicated by the Fed”.

Reporting by John Ruwitch; Editing by Shri Navaratnam

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