27 June, AtoZForex – In the aftermath of the EU referendum vote results, investors all around the globe are in doubts of what next steps should they take. The financial regulators and central banks are currently trying to provide any possible treatment for the Brexit related market turmoil. The International Monetary Fund (IMF) is not an exclusion, as it has called for the UK and the EU to take measures to overcome the uncertainties around the implications of Britain’s choice to leave the Eurozone.
IMF requires quick post Brexit action
IMF ordered the EU and UK to act fast and efficient, by collaborating and utilizing the time and opportunities wisely. The three days of confusion around the UK leaving Eurozone has triggered the disturbing trends in the financial and economic market. Christine Lagarde, the IMF chair, stated that the IMF “will continue to encourage the parties involved to actually proceed with this transition in the most efficient, predictable way in order to reduce the level of uncertainty, which will itself determine the level of risk we are facing.”
Additionally, Ms. Lagarde has mentioned that there was turmoil in the Conservative and Labour parties in the UK. She said that EU heads had sent mixed messages related to the process of maintaining the Brexit event properly. Christine Lagarde also commented on the matter:
“At this point in time policymakers both in the UK and in Europe are holding that level of uncertainty in their hands and how they come out in the next few days is really going to drive the direction in which risk will go. We are hearing at the moment, and I’m not inventing it, different statements going a little bit in many directions.”
IMF was warning about Brexit consequences
As IMF requires quick post Brexit action from the EU and UK , it appears the fund was already warning British residents about the possible economic consequences of Brexit. IMF head believes that:
“Policymakers are going to be in high demand to in the most cohesive, concerted and hopefully positive way in response to the situation.”
As you may already know, the Brexit campaign success has triggered the resignation of UK Prime Minister David Cameron. This event, in turn, has caused the leadership struggle at the weekend in the opposition Labour party. Also, there are a lot of issues to be resolved about the UK existence in the Eurozone, such as new agreements and norms.
As for EU foreign ministers and the leading figures in Brussels, they have also demanded a quicker reaction from the UK. They asked for faster negotiations process, as Britain has two years to settle all the formal agreements.
Angela Merkel, the German chancellor, said she is not going to push for an instant withdrawal. As she commented this: “There is no reason to be particularly nasty.”
All in all, the markets on Friday have experiences ‘voilent, brutal’ price moves. The volatility was not accompanied by panic, Ms. Lagarde stated.
Also see: Morgan Stanley Forex outlook post Brexit
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