{
  "title": "Emerging Market Resilience: Good Luck or Good Policies?",
  "publication": "IMF Working Papers, December 5, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2025/12/05/emerging-market-resilience-good-luck-or-good-policies-572387",
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  "summary": "Emerging markets have shown remarkable resilience during risk-off episodes in recent years. While favorable external conditions—good luck—contributed to this resilience, improvements in policy frameworks—good policies—played a critical role in bolstering the capacity of emerging markets to withstand",
  "sections": [
    {
      "heading": "Summary of main findings",
      "content": "- Emerging markets have shown remarkable resilience during risk-off episodes in recent years.\n- Favorable external conditions (\"good luck\") contributed to this resilience.\n- Improvements in policy frameworks (\"good policies\") played a critical role in bolstering capacity to withstand adverse consequences of risk-off events.\n- Improvements in monetary policy implementation and credibility have reduced reliance on foreign exchange (FX) interventions and capital flow management measures.\n- Stricter macroprudential regulation also contributed to less FX interventions.\n- Central banks have become less sensitive to fiscal interference and hold sway over domestic borrowing conditions.\n- Countries with robust frameworks face easier policy trade-offs and are better positioned to navigate risk-off episodes.\n- Economies with weaker frameworks risk de-anchoring inflation expectations and larger output losses if monetary tightening is delayed, especially when persistent price pressures emerge.\n- In settings with weaker frameworks, FX interventions offer only temporary relief and are less necessary when policy frameworks are sound."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Strengthen monetary policy implementation and credibility to reduce dependence on FX interventions and capital flow management measures.\n- Reinforce macroprudential regulation to lower the need for FX interventions during stress episodes.\n- Enhance central bank independence and resistance to fiscal interference to maintain control over domestic borrowing conditions.\n- Prioritize prompt monetary tightening when persistent price pressures emerge to avoid de-anchoring inflation expectations and larger output losses.\n- Recognize that FX interventions are temporary tools and are less effective in the absence of sound underlying policy frameworks.\n\n---\n\n Content in this bundle\n\n- wpiea2025256-source-pdf\n  - wpiea2025256-source-pdf (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wpiea2025256-source-pdf (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2025/12/05/emerging-market-resilience-good-luck-or-good-policies-572387"
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    "Authors: Marijn A. Bolhuis, Francesco Grigoli, Marcin Kolasa, Roland Meeks, Andrea F Presbitero, Zhao Zhang",
    "Published: December 5, 2025",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798229033886.001",
    "Emerging markets have shown remarkable resilience during risk-off episodes in recent years.",
    "Favorable external conditions (\"good luck\") contributed to this resilience.",
    "Improvements in policy frameworks (\"good policies\") played a critical role in bolstering capacity to withstand adverse consequences of risk-off events.",
    "Improvements in monetary policy implementation and credibility have reduced reliance on foreign exchange (FX) interventions and capital flow management measures.",
    "Stricter macroprudential regulation also contributed to less FX interventions.",
    "Central banks have become less sensitive to fiscal interference and hold sway over domestic borrowing conditions.",
    "Countries with robust frameworks face easier policy trade-offs and are better positioned to navigate risk-off episodes.",
    "Economies with weaker frameworks risk de-anchoring inflation expectations and larger output losses if monetary tightening is delayed, especially when persistent price pressures emerge.",
    "In settings with weaker frameworks, FX interventions offer only temporary relief and are less necessary when policy frameworks are sound.",
    "Strengthen monetary policy implementation and credibility to reduce dependence on FX interventions and capital flow management measures.",
    "Reinforce macroprudential regulation to lower the need for FX interventions during stress episodes.",
    "Enhance central bank independence and resistance to fiscal interference to maintain control over domestic borrowing conditions.",
    "Prioritize prompt monetary tightening when persistent price pressures emerge to avoid de-anchoring inflation expectations and larger output losses.",
    "Recognize that FX interventions are temporary tools and are less effective in the absence of sound underlying policy frameworks.",
    "**wpiea2025256-source-pdf**"
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