As global markets wait impatiently to see when the US Federal Reserve will hike its interest rates for the first time in 7 years, capital outflows from the emerging markets have been accelerating. Turkey’s Deputy Prime Minister Cevdet Yilmaz called on the G20 countries and emerging markets to do more during these turbulent times.
Speaking at a press briefing after the Group of 20 industrial and developing nations’ two-day meeting, Yilmaz said Turkey is improving its business environment to attract foreign investments prior to Fed’s monetary tightening decision. Yilmaz also said that Turkey is reducing its bureaucratic obstacles as a part of structural reforms.
“The emerging world is aware of this development, so many countries, including Turkey, are taking steps to increase our attractiveness as a market for global capital,” Yilmaz added.
Turkey’s deputy prime minister, who is also in charge of the economy, emphasized the importance of reaching G20’s target of reaching an additional 2 percent increase in growth over five years.
Emerging markets have been hit by capital outflows on speculation about the timing of Fed’s potential rate hike. According to recent data, cash outflows from the developing world have risen to $1 trillion over the past 13 months.
The Fed will hold its next meeting on September 16-17. Although some economists argue that a rate hike is priced in by global markets, many of them expect the economic slowdown in China to postpone a rate hike beyond September.