CCTV.com - CNTV English - CCTV News


Homepage > News > Biz >

IMF warns of hot money problem for emerging economies

06-22-2010 08:35 BJT

WASHINGTON, June 21 (Xinhua) -- The International Monetary Fund (IMF) has warned that the emerging economies, which have recovered faster than the advanced economies from the financial crisis, could face a new challenge of hot money problem.

"Executive Directors (in the IMF) saw the risk that fast recoveries may lead to rising capital inflows, closing output gaps, and rising inflation," said the IMF on Monday in a paper examining the performance of 57 emerging markets during the recent global financial crisis.

"Raising interest rates when policy rates in major advanced economies remain near historic lows could prompt excessive capital inflows, which could, in turn, fuel asset price bubbles," said the IMF.

"Thus monetary policy decisions may be constrained in some emerging market countries."

The Washington-based agency noted that countries have a range of policy options to cope with resurgent capital inflows depending on individual country circumstances: allowing the exchange rate to appreciate, building reserves, easing monetary policy, altering the macro policy mix, implementing macro-prudential measures.

"If deemed necessary under certain circumstances, temporary price-based capital controls" could be executed, said the IMF.

Meanwhile, the IMF said the recovery has been uneven across emerging market countries.

Those with better pre-crisis fundamentals and those that provided more stimuli during the crisis are recovering faster.

Moreover, recovery across emerging market countries has been helped by, and in turn contributed to, growth in advanced economy trading partners, said the IMF.

Editor:Xiong Qu |Source: Xinhua

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program