The developing markets are suffering for fourth week in a row. The china was expected to drive the growth but it couldn’t manage. The currencies are struggling world over due to Greek debt crisis. The Emerging markets index by MSCI, a Morgan Stanley division increased to 979.46, 0.3 percent growth rate. Hong Kong stock markets growth was driven by banks and insurance sector as both are performing well since last two-week.
The scenario is different at the mainland. The Bloomberg conducted a survey of 20 developing market’s currencies and it shows that all are dropping constantly. The Chinese banking sector may look forward to reduce reserve requirement ratio for the banks so that more money can be pumped into the markets. The Goldman Sachs Group Inc. , China Merchants Bank Co. and HSBC Holdings PLC have predicted that the central bank may cut the ratio for the third time in a single year. Inflation is under control in China but lowering exports are major concern. The data predict that exports are falling for straight third month now.
The measures of monetary easing can work in the favor of the economy and China. The emerging markets head Hertta Alava from FIM Asset Management Ltd. Informed that the reserve requirement ratio will be reduced soon to encourage the economy. The summer has proved to be unproductive in solving the Greek crisis which is going to affect the entire world economy. The whole world including the United States hopes positive growth rates in emerging markets like India and China to drive the positive outlook in the world economy.