IMF: Central banks must be careful when tightening policy

WASHINGTON (Reuters) - Central banks in advanced economies must act carefully when the time comes to tighten monetary policy to avoid destabilizing emerging markets, the International Monetary Fund's steering panel said on Saturday.

As growth in advanced economies strengthens, the shift to a more normal policy stance should be "well-timed, carefully calibrated and clearly communicated," the panel said in a statement.

The prospect of the U.S. Federal Reserve reining in its stimulus by year end spooked world markets earlier this year and plunged some developing countries into turmoil as the gusher of cheap dollars that had poured into their economies dried up.

(Reporting By Steven C. Johnson; Editing by Chizu Nomiyama)

Source: http://news.yahoo.com/imf-central-banks-must-careful-tightening-policy-174024905--business.html
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