Financial resilience may be tested further by Covid-19 – IMF

“Sudden stop” in credit markets could feed back to real economy, and requires a “forceful response”

IMF Headquarters 2 Washington DC 524.jpg
Photo: John Harrington

The International Monetary Fund says central bank actions have helped stabilise markets in the wake of the Covid-19 shock, but further turbulence could be on the way.

Emerging markets are already facing a “perfect storm”, having suffered the sharpest capital outflows on record during the opening stages of the Covid-19 pandemic. Further problems could stem from fire sales by asset managers and rising defaults, the IMF’s latest Global Financial Stability Report says.

“As firms become distressed

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