WASHINGTON (Reuters) - The emerging market countries taking tough action on reforms and managing their economies well are having an easier ride in the current market selloff, U.S. Treasury Secretary Jack Lew said on Wednesday.
“I will say that we’re seeing a lot of differentiation in the marketplace and we’re seeing that countries that have taken tough actions and managed well are having a different experience,” Lew told reporters traveling with President Barack Obama aboard Air Force One.
Emerging markets have been pummeled since last week due to a volatile combination of political troubles in several countries and the prospect of the U.S. Federal Reserve easing back on its monetary stimulus during the year.
Turkey and South Africa aggressively raised interest rates on Wednesday to stop capital flight while other countries, including Malaysia and Mexico, are taking more of a wait-and-see approach.
Lew brushed off a question about whether he had been in touch with Group of Seven counterparts, saying he spoke to them “all the time, both when we’re at meetings and when we’re not,” adding that he did not want to comment on day-to-day market moves.
An official from the Group of 20 leading and emerging nations said the group was “closely watching the situation,” and would discuss emerging market volatility at a meeting of finance ministers and central bank governors in Sydney next month.
“There is turbulence, but emerging market economies’ fundamentals are much stronger than they were in the late ‘90s,” he said, speaking on the condition he not be named.
“As the (Jose Viñals, head of the IMF’s monetary and capital markets department) said (on Tuesday), this turbulence largely reflects ‘a combination of idiosyncratic factors,'” the official added.
Reporting by Jeff Mason, Steve Holland, and Mark Felsenthal, writing by Krista Hughes; editing by G Crosse