A top International Monetary Fund official on Tuesday said emerging markets must act quickly to tame rampant inflation, but said there is no need to worry yet about a global market selloff.
“This is not a panic situation,” said José Viñals, the IMF’s top financial counselor, in a briefing with reporters, after nearly a week of selloffs in emerging market bond, currency and equity markets. “So far, this is a combination of idiosyncratic factors,” including domestic turmoil and headwinds from abroad, in a subset of emerging market economies, he said.
Many emerging market economies have suffered from investor pessimism. But Argentina, Turkey, Ukraine and South Africa have been hit the hardest, as investors have shown increasing skepticism about the ability of authorities to calm growing political and economic turmoil.