IMF calls on EM to bolster economic fundamentals| MENAFN.COM

Sunday, 05 February 2023 12:32 GMT

IMF calls on EM to bolster economic fundamentals

(MENAFN- Khaleej Times) "The turbulence also underscores the need for vigilance among central banks over liquidity conditions in international capital markets," the IMF said in an e-mailed statement on Saturday

Emerging-market stocks declined on Friday as signs of a Chinese slowdown and worse-than-estimated Russian economic data bolstered concern the global recovery will falter. The MSCI Emerging Markets Index retreated 0.2 per cent to 934.50 at 12:34pm in New York, bringing this year's slide to 6.8 per cent

About $1.8 trillion has been erased from the value of equities worldwide this month after China's manufacturing contracted, the Federal Reserve tapered monetary stimulus and political unrest in Ukraine escalated

Russia's economy grew at less than half the previous year's pace in 2013, missing forecasts as investment declined, data on Friday showed

Treasury Secretary Jacob J. Lew said on Friday the US is following the situation "very closely.

"We're seeing very significant differentiation between the experience in different countries based on the policies that they've had in effect," Lew said to reporters in Disputanta, Virginia

"We're watching it, and in each of these countries they are managing to get through the situations that they are in.

The volatility in emerging markets "highlights the need for coherent macroeconomic and financial policies, good communication, and, in some cases, the need for urgent policy action to improve fundamentals and policy credibility," the Washington-based IMF said. "Several emerging countries have responded forcefully in recent days," and many countries have "solid fundamentals with high reserves, fiscal space and inflation under control.

While it is difficult to pinpoint "a single trigger" for the emerging markets selloff, "the turbulence underscores the challenging situation that many countries face as a result of tighter external financing conditions, slower growth, and softer commodity prices," the IMF sai

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