Challenges to emerging markets manageable: Fed Powell
- Monetary conditions around the world are anticipated to gradually normalize, Fed governor says

The challenges against emerging market economies under the current global financial conditions will be manageable, the U.S. Federal Reserve Governor Jerome Powell said Thursday.

Speaking at the 2017 Annual Membership Meeting of the Institute of International Finance in Washington D.C., Powell said vulnerabilities of emerging market economies are rising, but they are below the levels of the 1980s and 1990s when those economies had experienced crises.

He added that monetary conditions around the world are anticipated to normalize gradually, especially as the Fed and other advanced economies' central banks continue transparent communication.

"It bears remembering that Fed policy normalization is occurring not in isolation, but in the context of a solid U.S. economic recovery, which should benefit all economies around the world," he said.

"The challenges posed to EMEs [emerging market economies] by the normalization of global financial conditions will be manageable," he added.

Powell, however, warned that significant risks remain against emerging market economies.

The corporate debt situation in emerging markets is worsening, especially in China, Powell said.

"Market reactions to even small surprises can be unpredictable and outsized," he warned.

By Ovunc Kutlu in New York

Anadolu Agency




13 Oct,2017