- POSTED: 13 Oct 2013 02:22
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Advanced countries should time their moves to tighter money policies carefully and communicate their plans well to not upset the global financial system, the IMF's steering committee said on Saturday.
WASHINGTON: Advanced countries should time their moves to tighter money policies carefully and communicate their plans well to not upset the global financial system, the IMF's steering committee said on Saturday.
With the US Federal Reserve moving toward reducing its huge stimulus program, and other advanced economies' central banks likely to soon follow suit, "normalising" their ultra-low interest rates and easy-money policies, the International Monetary and Financial Committee (IMFC) stressed the need to move cautiously.
"The eventual transition toward the normalization of monetary policy in the context of strengthened and sustained growth should be well-timed, carefully calibrated, and clearly communicated," the IMFC said.
It also said, in a statement during the International Monetary Fund's annual meetings with the World Bank, that advanced countries need to craft their tighter medium- term policies with an eye to not damaging near-term growth and job creation.
"These actions will help to mitigate risks and manage spillovers, including those stemming from increased capital flow volatility," it said.
The statement, which reflects the views of some of the world's top central bankers and financial policymakers, came as emerging-market countries continue to struggle with the prospect of tightening money policies from the US Federal Reserve, which has pushed interest rates up sharply in the past five months.
Emerging economies have experienced sudden capital outflows and sinking currencies sparked in part by the Fed's expected policy path, though the US central bank has so far held off cutting back its $85 billion a month stimulus program.