WASHINGTON : The International Monetary Fund (IMF) (Picture)said Friday that global financial market turmoil sparked by the troubled US mortgage sector and a related credit crunch should be "manageable." The multilateral lender said global economic growth should not be derailed by the mortgage and credit jitters, which have triggered sharp falls on US, European and Asian stock markets.
"While the situation is still evolving, we continue to believe that the systemic consequences of the reassessment of credit risk that is taking place will be manageable," said IMF spokesman Masood Ahmed.
"The fundamentals supporting strong global growth remain in place, and the re-establishment of credit discipline that is occurring is a healthy development," the spokesman said.
He said IMF officials were closely tracking market developments around the globe.
The spokesman said interventions by a number of central banks, including the US Federal Reserve, which injected 38 billion dollars into the US financial system Friday, should help calm markets and soothe rattled investors.
The IMF had predicted a so-called "correction" in global credit markets, and senior fund officials have said in recent days that the financial jitters show investors are more risk averse.
"Market discipline, when it arrives, is almost inevitably uncertain in terms of timing, somewhat uneven in terms of impact and to the outside observer inevitably appears a bit messy," IMF deputy managing director John Lipsky told a meeting of Asia Pacific finance ministers last week. - AFP /ls
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