The International Monetary Fund IMF advised emerging economies such as Nigeria to prepare for the United States’ interest rate hikes, warning that faster than expected Federal Reserve hike could rattle financial markets, trigger capital outflows and currency depreciation in the countries.
In an article published by some of its staff, which was obtained on its website, the multilateral institution stated that it expected robust US growth to continue, with inflation likely to moderate later in the year.
However, it pointed out that some emerging markets have already started to adjust monetary policy and are preparing to scale back fiscal support to address rising debt and inflation.
Furthermore, the multilateral institution noted that for most of last year, investors priced in a temporary rise in inflation in the United States given the unsteady economic recovery and a slow unravelling of supply bottlenecks.
