Monthly Archive: May 2017

3 Ways The Fed Rate Increase Will Impact Emerging Markets

The Federal Reserve has a big impact on the U.S. stock market. It also affects the global financial market. As the dollar is a global currency, any changes in its valuation have a great impact on everything. Here are three ways it can impact emerging marketing.

Increase in corporate defaults

There ae many companies who took advantage of the low U.S. interest rates. They borrowed in dollars and repaid debt with a currency that is stronger. If there is an increase in U.S. interest rates then these companies will have a difficult time repaying their debts.

Lower foreign investment

The emerging market economies relied on the increase in foreign investment to drive their economic growth. If the interest rate becomes higher than the investors will move back to the U.S. and so there will be an outflow of capital from emerging markets. Due to low foreign investment, many economies will be affected.

Decrease in currency values

Due to low U.S. interest rates many emerging markets had appreciation in their currencies. For example, the USD/ZAR currency rose from less that 10.00 to 17.00. Because of this South Africa could leverage the currency valuation to take a loan from U.S to finance their growth initiatives. But if this rate falls, it will affect the South African market. It will hurt the investments.

As you can see that the Federal Reserve has a significant impact on both the domestic market and the international market as well. The emerging markets are vulnerable to the changes in interest rates.

Top 4 Political Factors That Affect Development Of a Country

Politics can significantly affect the development of a country. It affects the life of people, business, investments, etc. Here we look at the four major factors that have a huge impact on the development.

Poor management

The government has to do many things to encourage development. They should develop and maintain infrastructure and they should invest in the right projects. If the government fails to manage the infrastructure then development will be impossible. The government must set up laws and practices so that it encourages investments.

Corruption

If corruption is widespread in a country then it will hinder its development. Crooked policemen, customs officials, and others are usually involved in corruption and their unethical act negatively affects the development of a country.

Trade laws

Trade laws like tariffs can affect development. The developing countries have to face higher tariff barriers to enter a rich country. So, there will be less import if the tariff is raised.

Political instability

Political instability is a reason a country cannot develop. Countries that have long-term conflicts find it difficult to attract investors. Local business and people’s daily life are also affected. A country with constant political instability cannot develop.

The developing countries need to look at these factors and try to take steps so that they can develop. They should attract investors and encourage local firms to import. This way a country can develop steadily. A good government is necessary who can drive the country forward.

4 Ways To Get The Best Deal Before Energy Price Cap In The UK

Energy price cap will be soon introduced in the UK. It will reduce the benefits of those people who shop around to get the best deal. The energy prices have increased recently and people are having a tough time paying their bills. Here are four ways you can get the best deal before the energy price cap is introduced.

Find out if you will be charged for switching

You should stop shopping around for getting a better contract. Know the amount of energy you use at the moment. If you are on a variable tariff then you can switch without paying anything extra. If you ae on a fixed deal or online offers then you may be charged for switching to a different supplier.

Negotiate

If you are on a fixed rate and you know that you will be charged extra for switching, you can negotiate and make a good deal with your current supplier or with some other provider.

Best fixed deals

Fixed tariffs are the cheapest deals right now. Some fixed deals have very high exit fees. You should be careful about that.

Get variable prices

Though fixed rate prices are cheaper compared to variable tariffs, the price difference has decreased. So, you should weigh your options and then decide whether to go for fixed rate price or a variable price.

These are some tips to deal with the proposed energy price cap. These tips will help you to pay lower energy bills every month.