Emerging Market Policies In emerging market economies, policymakers
should take advantage of current favorable external conditions to
further enhance their resilience,
including by continuing to strengthen
external positions where needed and reduce corporate leverage where it
is high. Deploying policy buffers and exchange rate flexibility would
help buffer external shocks, while improving corporate
debt-restructuring mechanisms and monitoring firms’ foreign exchange
exposures would lower corporate vulnerabilities. Advances in these areas
would leave these economies better placed to cushion any reduction in
capital inflows that may occur from monetary policy normalization in
advanced economies
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