FDI is “foreign direct investment” which is when foreigners either build plant and equipment or purchase existing infrastructure directly. The level of interest rates should not have a meaningful effect. After all if an investor is willing to submit to foreign regulations and risk expropriation the level of interest rates is a minor concern. FDI is falling in part to geopolitical tensions but is also under pressure due to uncertainty surrounding regulation. The raids conducted last year and reports of preventing foreigners from leaving are probably sending investors elsewhere.
On the other hand portfolio investment would be affected by interest rates.
A different rate environment probably won’t bring FDI back. But a new general secretary might
Thank you for an excellent interview.
Bruce,
FDI is “foreign direct investment” which is when foreigners either build plant and equipment or purchase existing infrastructure directly. The level of interest rates should not have a meaningful effect. After all if an investor is willing to submit to foreign regulations and risk expropriation the level of interest rates is a minor concern. FDI is falling in part to geopolitical tensions but is also under pressure due to uncertainty surrounding regulation. The raids conducted last year and reports of preventing foreigners from leaving are probably sending investors elsewhere.
On the other hand portfolio investment would be affected by interest rates.
A different rate environment probably won’t bring FDI back. But a new general secretary might