More than $1.1trn (£705bn) has been pumped into emerging markets since 2008 as investors deterred by rock-bottom interest rates and money printing in the West sought higher returns, IMF managing director Christine Lagarde said yesterday.
In a speech at the Jackson Hole symposium in the US, Ms Lagarde said the inflow was an estimated $470bn above long-term trends, boosting property prices, shares and credit markets in countries including Brazil, China, Korea and Thailand.
This is according to an IMF study of assessing the impact of unconventional monetary policy on 13 countries not forced to undertake emergency measures.
Ms Lagarde stressed the impact of exceptional policy measures on emerging markets was still positive – “at least for now” – as countries took action to make their financial systems more secure and manage the flow of capital. But she warned: “We all know that the situation can turn quickly – as we have seen in recent days.”