IMF Urges Clear Communication to Avoid ‘Taper Tantrum’ Repeat

Central bankers in advanced economies must clearly communicate their plans to unwind monetary stimulus to avoid a repeat of the volatility unleashed in emerging markets last year, International Monetary Fund staff said.

“Surprises about the future course of monetary policy in major advanced economies have particularly strong effects on emerging-market asset prices and capital flows,” fund staff said in a report released today. “It is therefore important for advanced-economy central banks to provide clear communication and adequate market guidance.”