Global econ­omy over­comes Brexit tur­bu­lence – IMF

The Star (Kenya) - - News -

The In­ter­na­tional Mone­tary Fund has said the global econ­omy has man­aged to avoid “a cat­a­strophic fi­nan­cial cri­sis” that was ex­pected af­ter the UK voted to leave the Euro­pean Union on June 24.

The EU ref­er­en­dum, widely pub­li­cised as the Brexit, had been seen as a key driver of short-term risks in the past months, hav­ing caught in­vestors by sur­prise.

In the af­ter­math of the Brexit, the IMF says, the global mar­kets man­aged to op­er­ate with­out sig­nif­i­cant dis­rup­tion, and no ma­jor dis­or­derly events sur­faced, other than a sharp sell-off in some UKbased real es­tate funds.

“The global fi­nan­cial system has been strength­ened since the cri­sis, and the po­lit­i­cal shock was ab­sorbed by mar­kets,” the IMF said on Thurs­day in the lat­est series of the Global Fi­nan­cial Sta­bil­ity Report.

The as­sur­ance comes as re­lief for most coun­tries in the Sub-Sa­ha­ran Africa, which were among the mar­kets ex­pected to take a hit from the Brexit owing to en­trenched trade links with Bri­tain.

Kenya was par­tic­u­larly seen as a big ca­su­alty due to her ex­ten­sive eco­nomic re­la­tions with the UK, largely in hor­ti­cul­tural ex­ports.

“New fire­walls in the euro area, in­clud­ing the Euro­pean Cen­tral Bank’s as­set pur­chase pro­grammes and other back­stops, sup­ported smooth mar­ket ad­just­ment and pre­vented con­ta­gion,” the IMF said.

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