Easing may cause developing world asset bubbles: IMF chief
TOKYO (AFP) - Monetary easing in the developed world could cause overheating and asset bubbles in emerging economies, the International Monetary Fund's managing director said in Tokyo on Sunday.
"Accommodative monetary policies... could strain the capacity of those economies to absorb the potentially large flows and could lead to overheating asset price bubbles," Christine Lagarde said.
Critics in emerging nations have argued that easing measures, particularly in the United States, have driven down the value of the dollar and sparked huge capital flows to spill across their borders, raising the risk of overheating and driving up national currencies.
On Friday, Brazilian Finance Minister Guido Mantega warned that his country would take "whatever measures it deems necessary" to fight the problem.