World Bank to poor countries: Prepare for Fed taper
Washington - Developing countries must rapidly get their budgets in order for higher interest rates ahead of looming monetary tightening in the United States, World Bank President Jim Yong Kim said Thursday.
"We want to send the clearest possible message: Now is the time to move," Kim said Thursday during the joint annual meetings of the World Bank and the International Monetary Fund in Washington.
The rate-setting US Federal Reserve has been buying government-backed bonds at a pace of 85 billion dollars a month.
The unconventional monetary policy to bolster the US economic recovery forced investors out of safe-haven assets and drove down long-term interest rates. A side effect has been huge investment flows into faster-growing developing and emerging markets.
The Fed has signalled for months that it is poised to begin tapering its so-called quantitative easing, but has yet to act. The reduction could start as soon as October 30, when the US central bank is due to revise its monetary policy.//DPA
