In an exclusive interview with Xinhua News Agency, Dr Azamat Seitov, Head of the Laboratory of Anthropology and Conflict Studies, expressed his opinion on the risks to the global economy associated with changes in US monetary policy. He noted that the reduction of the US Federal Reserve System (FRS) interest rate in the short term may increase the liquidity of the dollar and have a favourable impact on the global economy. However, in the medium and long term, this process will lead to increased volatility in financial markets, higher inflation and debt risks, especially for developing countries.

 

Dr Seitov stressed that the rapid movement of capital in search of higher yields, caused by lower interest rates, can increase price fluctuations in global markets and increase investment risks, in turn, the decline in the attractiveness of dollar assets can affect the fluctuations of the dollar exchange rate. The expert added that manipulation of the US monetary policy, especially in the run-up to the presidential election, could have negative consequences for the global economy, intensifying the cycle of «prosperity-crisis-downturn».

 

Read the interview on the Xinhua News Agency’s website