China is shifting to an accommodative policy stance to contend with a challenging trade environment and lagged effects from its earlier tightening. Here at home, the impetus to growth from fiscal policy is likely to fade going into 2020. And after being exceptionally accommodative, financial conditions have tightened in recent months.
It is argued by some that since the late 1990s, the growth processes in many emerging market economies (EMEs), especially those from Asia, have come to rely heavily on external demand. Under such a scenario, it has been felt, many of these countries tried to maintain their external price competitiveness by keeping their currencies undervalued.