Indeed, recent studies argue that there is a significant degree of heterogeneity in the way different emerging economies were affected by US monetary policy5. Pull factors, such as country-specific fundamentals and institutional characteristics, are just as important as “push factors” coming from developed economies. For instance, countries with fundamentally undervalued exchange rates are of course prone to surges in capital inflows.
The Bank has been conducting powerful monetary easing under the framework of “Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control” introduced in September 2016.