IMF-Central banks must be careful when tightening policy

Reuters

WASHINGTON, Oct 12 (Reuters) - Central banks in advancedeconomies must act carefully when the time comes to tightenmonetary policy to avoid destabilizing emerging markets, theInternational Monetary Fund's steering panel said on Saturday.

As growth in advanced economies strengthens, the shift to amore normal policy stance should be "well-timed, carefullycalibrated and clearly communicated," the panel said in astatement.

The prospect of the U.S. Federal Reserve reining in itsstimulus by year end spooked world markets earlier this year andplunged some developing countries into turmoil as the gusher ofcheap dollars that had poured into their economies dried up.

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