"We call on AEs (advanced economies) to be mindful of negative spillovers and to clearly communicate their exit strategies," a communique by the group of 24 nations, a bloc of developing nations including India, said.
The communique expressed concern at fluctuations of capital flows. "We are concerned by the higher volatility in global financial markets following indications of exit from unconventional monetary policies, as well as the renewed policy uncertainties in some advanced economies," the communique said.
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Meanwhile, the International Monetary Fund (IMF) has cautioned that outflows from stock and bond markets could renew in many Asian countries.
The update to the Regional Economic Outlook said it was a risk and would cause an increase in borrowing costs in many Asian countries.
In such a global context, the report underlined the importance of allowing currencies to adjust to changing international conditions as a means to help cushion the impact of turmoil in global financial markets.
The report also noted countries that were more dependent on foreign borrowing, and with poorer growth prospects were likely to experience a larger impact from these changes.
While the report said in most countries, the effects of the turnaround in capital flows had so far been "manageable," India and Indonesia had been harder hit.
High inflation and a reliance on foreign borrowing have left both countries exposed to shifts in global liquidity.
"With investors differentiating between markets more than in the past, these countries have come under more pressure. In both countries, central banks have raised interest rates and further rises will likely be needed in the coming months," the report added.
Speaking at a press conference in Washington to mark the launch of the IMF's update to its Regional Economic Outlook, Anoop Singh, the head of the Asia and Pacific Department, said: "We are essentially optimistic that despite the more complex global environment, Asia will remain a growth leader with emerging Asia growing above six percent this year and next year."
The Federal Open Market Committee (FOMC) will meet on October 29-30 and December 17-18. It had last month postponed tapering of $85-billion bond buying programme a month.
There are reports that the Fed might again put off its tapering plan at least till March 2014, as the ongoing government shutdown in the US has restrained economic growth.
Stock markets, including in India's, witnessed wide volatility when the Fed was to announce its tapering plan last month. But putting off the plan had led to brisk buying in the markets.
IMF said besides capital outflows, other potential risk factors are weak government budgets, insufficient international reserves at central banks, and weak banks and companies.
Developing economies also regretted missing of deadline for quota reforms in the IMF. "We deeply regret that the agreed October 2012 deadline for entry into force of the 2010 quota and governance reform was missed and that there was no agreement on a new quota formula by the review deadline of January 2013."
It said both were critical to the Fund's legitimacy, credibility and effectiveness, the communique added.
ALARM CALL
- A communique by a group of 24 nations, a bloc of developing nations including India, has called on advanced economies to be mindful of negative spillovers and to clearly communicate their exit strategies
- The IMF's Regional Economic Outlook has said there is a risk of an increase in borrowing costs in many Asian countries
- The report underlined the importance of allowing currencies to adjust to changing international conditions as a means to help cushion the impact of turmoil in global financial markets
- The report also noted countries that were more dependent on foreign borrowing, and with poorer growth prospects, were likely to experience a larger impact from these changes