Investors observe stock market at an exchange hall on January 6, 2016 in Beijing, China.
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The plunge in oil prices has hit many emerging market currencies — and their central banks now face a “policy dilemma” of how to support their respective economies amid an expected slowdown in growth, an analyst said on Monday.
“Central banks across emerging markets are, on the one hand, facing huge sell-offs in their currencies; and on the other hand, a slowdown in growth,” Cedric Chehab, head of country risk and global strategy at Fitch Solutions, told CNBC’s “Street Signs Asia.”
“So what do they do? Do they cut interest rates to stimulate growth or do they raise interest rates to support their currencies? I think a lot of central banks are going to be squeezed by this policy dilemma now,” he added.
Oil prices dived to around $30 per barrel on Monday after the Organization of the Petroleum Exporting Countries, or OPEC, failed last week to strike a deal with its allies —…