S. Korea urges caution on monetary policy shift from major economies
SEOUL (REUTERS) - South Korea on Wednesday cautioned major economies to consider the global ripple effects of any shift in their monetary policy stance, as emerging markets bore the brunt of the recent selloff in their currencies in the wake of the US Federal Reserve's plan to trim its bond-buying stimulus.
"As discussions about US's exit strategy have intensified, concerns about greater volatility in global financial markets such as a rise in interest rates and market unrest have been raised," South Korea's presidential office said in a statement ahead of the G-20 summit in Russia later this week.
"If a reserve currency country changes its monetary policy stance, it should consider not only its domestic economic conditions but the effects on the global economy," the statement said.
The comments come in the wake of the recent shakeout in emerging markets, particularly India and Indonesia, whose currencies have tanked on concerns of a flight of capital towards dollar-based assets once the Fed starts reducing its bond-buying programme.