Industry Voice: How digital currencies add policy potency for emerging markets

More monetary policy control as rate decisions have a broader impact

clock • 2 min read
Industry Voice: How digital currencies add policy potency for emerging markets

Digital currencies issued by emerging market (EM) central banks are set to enhance financial inclusion and facilitate greater control over their nations' economies.

As central bank digital currencies (CBDCs) are adopted in EM countries, more people become directly exposed to interest rate decisions, greatly strengthening the power of monetary policy. This will likely reduce inflation and interest rate volatility and, ultimately, lower long‑term bond yields.

In this third article in a series, we discuss how CBDCs will strengthen monetary policy in EM countries and how changes in the savings and investment balances will strengthen the economies of those countries.

 

 

 

Important Information

For professional clients only. Not for further distribution.

This material is being furnished for general informational purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, and prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.

The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request.

It is not intended for distribution to retail investors in any jurisdiction.

This material is issued and approved by T. Rowe Price International Ltd, 60 Queen Victoria Street, London, EC4N 4TZ which is authorised and regulated by the UK Financial Conduct Authority. For Professional Clients only.

© 2021 T. Rowe Price. All rights reserved. T. ROWE PRICE, INVEST WITH CONFIDENCE, and the bighorn sheep design are, collectively and/or apart, trademarks or registered trademarks of T. Rowe Price Group, Inc.

Advertisement

More on Investment

Lushan Sun

The investment opportunity in crossover credit

Lushan Sun breaks down how pension schemes can harvest rewards

Lushan Sun
clock 20 May 2022 • 3 min read
R&M chief executive Alex Hoctor-Duncan

FCA approves AssetCo takeover of R&M

Comes after a 'firm intention' for the deal was confirmed in January

Lauren Mason
clock 19 May 2022 • 1 min read
Industry Voice: The vital role of private assets in climate investing

Industry Voice: The vital role of private assets in climate investing

The need for investment in order to tackle climate change is greater than ever and private assets can help support positive climate solutions

Schroders Capital
clock 19 May 2022 • 1 min read
Trustpilot