Currency devaluation ‘easy’ answer to emerging market crisis – Saxo Bank chief

Reuters / Lucas Jackson
The emerging market currency crisis is being propelled by policymakers who are “seeking the easy answer” by devaluing their currency, which is an unsustainable global model, Saxo Bank CEO Steen Jacobsen told RT. The spectacular loss of value in emerging market currencies – the South African rand, the Russian ruble, the Indian rupee, and the Turkish lira-is a result of government’s tightening monetary policy, which has even further driven down the value against the euro and dollar . Governments face huge monetary policy decisions in the third and final stage of the global financial crisis which kicked off in 2008 with America’s sub-prime mortgage crisis and spilled into Europe, but simultaneous devaluation of currencies in the hope of driving up exports can’t be universally applied, says the Saxo Bank chief.
Spencer Platt / Getty Images / AFP“We are in the final part of this cycle. Which comes next is probably the mandate for change. All we need to Change, the export-driven model Is not Sustainable Business, “ Jacobsen RT Told in an Interview at His Moscow office. 2013 has been a train wreck of a year for emerging currencies, which are taking a huge beating from the euro and dollar as their respective economies regain post-crisis strength. India’s rupee has had one of its worst years ever, and in 2013 lost 11 percent against the dollar. The ruble has hit a 5-year Low Against both the Dollar and Euro, soaring above 48 rubles against the euro, and over 35 rubles against the dollar. The rand hit a five-year low at 11.3785, the highest since October 2008. The Turkish lira and Mexican peso fell in response to the big dip. More
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