Investors have made too much of the Federal Reserve’s plans to start scaling back its asset purchases and emerging economies should instead focus on fiscal and structural reforms to make them more resilient, John Lipsky, the former first deputy managing director of the International Monetary Fund (IMF) said on Thursday.
“Too much can be made of the tapering issue, especially as it has been controversial how much impact QE3 (the Federal Reserve’s third round of quantitative easing) has even had on the U.S. economy and elsewhere,” Lipsky told CNBC from the Skybridge Alternatives Conference in Singapore.
Instead, he said those strains were mainly because of large current deficits in emerging economies and relatively moderate global growth.
Fed Chairman Ben Bernanke in May indicated the possibility of a reduction in the central bank’s bond buying program. The news hit emerging market assets and sent the Indian rupee to an all-time low.
via CNBC 
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