Emerging markets could get hurt – IMF

THE “normalisation” of US monetary policy, no matter how well implemented, could hurt emerging markets and undermine financial stability, International Monetary Fund (IMF) managing director Christine Lagarde said yesterday in a speech after arriving in the Rwandan capital of Kigali. “Even if this process is well-managed and well- communicated – and I believe that it has been and will be – there could be negative effects for emerging markets and global financial stability,” Lagarde said. This added to risks that included geopolitical tensions from conflicts in Ukraine, the Middle East and Africa, and the declining price of oil, which was leaving crude producers with more “external and balance sheet vulnerabilities”, she said. The IMF last week made the steepest cut to its global growth outlook in three years, forecasting expansion of 3.5 percent in 2015 compared with a 3.8 percent estimate given in October. “With the exception of the US and the UK, momentum is slowing in many advanced and emerging economies, including China, one of Africa’s main trading partners,” the lender’s managing director added. – Bloomberg