On December 16, 2015, US Federal Reserve (Fed) has ended its crisis-adapted monetary policy increasing by 0.25% its rates for the first time in 10 years.

The rate which since 2008 ending had been fluctuating in a 0 to 0.25% range now climbs to a 0.25%-0.50% range.

Fed said the reason for this decision was an improvement in US economy’s indicators. USA’s GDP growth this year was forecast at 2.1% against 2.4% for next year. Also, unemployment in the country has fallen to 5% from 10% in 2009.

The Federal Open Market Committee (FOMC) also said future rates increases would be “gradual”, adding that it would continue monitoring “international developments”.

Last September, Fed had already pushed a historical turn regarding monetary policy due to concerns over slowing Chinese economy

USA’s last rates hike was in 2006 where Fed tried to prevent a mortgage-backed financial bubble from bursting, but failed since it did in 2008 with the sub-prime crisis. With the mortgage bubble bursting in 2008, the Central Bank of America for seven years kept rates near zero whilst injecting about $3,500 billion in the system (Quantitative easing) to restart an economy in recession. .

According to experts, Fed’s decision to end the crisis-adapting monetary policy could negatively affect developing countries. Truly, due to the near-zero American rates, many investors placed huge amounts of money in Brazil, Turkey, or South Africa to get better returns. The reverse flow of capital which began since Fed’s announcement to increase the rates could very well increase in pace. World Bank has in fact, told emerging countries to “buckle their seatbelts” and brace for upcoming financial turbulence.

“We are advising nations, especially emerging economies to fasten their seatbelts,” said World Bank’s chief economist and senior Vice President Kaushik Basu on June 10, adding that “a raise in American interest rates could affect capital flows and raise borrowing costs”.