BoC's Murray-Exiting easy money policies will boost volatility

Tue Nov 5, 2013 4:04pm EST
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By Ann Saphir

SAN FRANCISCO Nov 5 (Reuters) - As central banks in advanced economies exit from extraordinarily easy monetary policies, there will be increased periods of market volatility, a top Bank of Canada official said on Monday.

But if emerging markets are tempted to respond by tightening capital and currency controls, they should understand that their own incentives and those in advanced economies are well aligned, Bank of Canada Deputy Governor John Murray said at the San Francisco Fed's Asia Economic Policy Conference.

"No one would want the advanced economies to exit too early or too late, and no one benefits from excessive market turbulence," Murray said. "There will be some episodes of increased volatility, but advanced economies are committed to being as transparent as possible to minimize surprises and smooth the adjustment."