IMF leader warns emerging markets risk facing more severe impacts from high US interest rates

IMF leader warns emerging markets face more serious negative impacts from the differences in monetary policy between Europe and the United States

On April 30, 2567, CNBC news agency reported that Kristalina Gorgieva, Managing Director of the International Monetary Fund (IMF) I think that Emerging Markets May face more severe negative consequences from the differences in monetary policy between Europe and the United States

Interest rates in most developed countries have increased in recent years. This is because the central bank aims to control inflation after the COVID-19 outbreak. These banks are now looking to lower interest rates. When the economy slows down Although signs in the US suggest that a rate cut may still be several months away,

A high US interest rate environment is often bad news for emerging markets. It can also stimulate capital outflows. This is because investors choose to receive better returns than in the United States. and may make the financial environment more tense.

“This is a much more serious problem for countries. That the impact of high interest rates in the United States is even more profound in many emerging market countries. …We still see some of this in Japan. And policymakers certainly need to pay more attention to carefully tracking where volatility is becoming more important.”

In the Eurozone, Kristalina Gorgieva said "Not too concerned about the impact of the exchange rate," it said, adding that IMF analysis showed a 50 basis point difference between the Federal Reserve's rate. and the European Central Bank's interest rates It is likely to lead to a small or 0.1-0.2% change in the exchange rate.”

refer : cnbc.com