IMF warned developing countries about FED. Noting that developing economies should be prepared, the IMF stated that there may be a depreciation in currencies.
The International Monetary Fund (IMF) warned the Fed for emerging markets. Developing country economies will come from the FED. prepare themselves for an interest rate hike IMF stating that; the faster-than-expected interest rates to volatility in financial markets and capital outflows; in currencies may cause loss of value. recorded.
Noting that the economy of the United States will continue to grow sharply, the IMF stated that the slowdown in inflation will occur towards the end of the year. The gradual tightening of US policy on developing countries ‘light’ will cause an effect stating the IMF; He also stated that large-scale wage inflation or ongoing supply chain problems may increase prices more than anticipated and inflation expectations may rise.
“Rapid rate hike may shake the markets”
Stating that this may lead to a faster tightening of the FED, the IMF also touched upon the rapid interest rate rise and the COVID-19 pandemic, “Emerging economies to economic turbulence must be prepared. Rapid interest rate hikes may shake the markets and global financial conditions may tighten. US demand may slow down, which could trigger capital outflows and depreciation in currencies in developing countries. recorded as.
In addition, countries with strong inflationary pressures interest rates boost should; He emphasized the importance of the Central Banks’ need to be in open and continuous communication for their tightening policy plans.
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Earlier, St. Louis Fed President James Bullard to fight inflation as of March, before forecasts He said he should start raising interest rates.