"Getting the fundamentals right" is a more effective way for developing countries to face market impact caused by U.S. taper, World Bank President Jim Yong Kim said Thursday.
The taper's impact was not the same across the entire developing world, as 62 percent of developing countries' currencies actually have appreciated since the Federal Reserve announced taper intention last May, Kim said in his opening press briefing at the IMF-World Bank Spring Meetings.
Market is picking on countries with greater imbalances, greater weaknesses, said Kim.
"So the message is really get back to fundamentals, tackle the basics, and if the fundamentals are in good shape, then the market will recognize that."
He also said that "our hope is that the taper will be gradual, and right now, indications seem to be that everyone intends, including the U.S. Federal Reserve, to make this as gradual as possible."
If the taper happens in a gradual fashion, the growth in the developed economies including the United States, Europe and Japan will offset the decrease in capital inflow into developing countries, Kim said.
"So even though there are these little blips, we think that the outlook for emerging market economies is still very good, " he added.
Source: Xinhua
