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EMs could face capital outflow because of Iran war, IMF warns

Systemic impact from stress in private credit contained so far, latest financial stability report says

International Monetary Fund Headquarters 2, Washington, DC
The International Monetary Fund
Photo: John Harrington

Emerging markets (EMs) could face currency and capital outflows amid worsening terms of trade and unwinding carry trades resulting from conflict in the Middle East, the International Monetary Fund has warned.

In its latest global financial stability report, published today (April 14), the IMF notes that financial markets have faced “significant challenges” since late February, when Israel and the US launched military strikes against Iran. It says the initial correction in asset prices was

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