IMF: Korea, Canada, Australia best placed for U.S. exit strategy

Korea, Canada and Australia are countries best placed to weather global market volatility from the tapering of U.S. quantitative easing, the International Monetary Fund said.

In a report "Global Impact and Challenges of Unconventional Monetary Policies" released Monday, the IMF said the impact of Fed`s QE tapering within the year-end will have limited impact on Korea since the amount of dollars flown into the country is relatively small.

According to the report, foreign capital inflow to Korea reached 44 billion dollars in the first three months this year, less than the annual average dollar inflow between 2000 and 2007. Inflation rate is low at 1.7 percent as of the end of July, below the Bank of Korea`s 2.5-3.5 percent target range, it added.

Korea`s short-term external debt position, which had dealt a fatal blow to emerging economies` currencies in times of financial crisis, has improved sharply. Bank of Korea announced in August that the share of short-term debt in Korea`s external liabilities reached 29.1 percent as of the end of June, the lowest since 28.6 percent recorded in late September 1999. The IMF also saw Canada`s exposure low to the exit strategy due to low share of dollar-denominated foreign debt.

Australia was also positively evaluated for its sufficient capability to weather capital outflow and financial market volatility.