UPDATE 2-IMF chief: China can avoid 'hard landing' but spillovers seen
(Recasts with comments on China)
By David Lawder
WASHINGTON Feb 4 (Reuters) - China can avoid a "hard landing" if Beijing pursues reforms to state enterprises and sticks to a more market-driven and well-communicated exchange rate policy, International Monetary Fund Managing Director Christine Lagarde said on Thursday.
But Lagarde said spillovers from China's transition to a slower, more sustainable growth rate would continue to pressure oil and commodity exporters around the globe, increasing demands for financing help from the IMF and other international institutions.
She told an online media briefing that the IMF wanted to be ready to handle any emerging market difficulties with new and improved financing tools.
"China is going through that massive, multi-faceted transition and we do not expect a hard landing of China as has been talked about for many years," Lagarde said.
She noted that China's transition will still be difficult and create market volatility, however. Oil and metals prices, now two thirds below their most recent peaks in 2014, will likely stay low for some time.
As a result, the international financial safety net "needs to be strong and needs to be readily available to face any circumstances," Lagarde said.
The IMF will be working in coming months to improve existing financing instruments, such as credit and liquidity lines, as well as new instruments to address their situations. Continuación...