Some of the AEs are expected to withdraw the accommodative monetary policy and the prolonged period of strong capital flows may come to an end and EMDEs may face a transition to more volatile external conditions.
An example of such volatile external conditions was experienced by EMDEs in the recent past following the announcement by the chairman of the Federal Reserve in May 2013 about the expected tapering of APP by year-end and complete exit by mid-next year. The Federal Reserve, however, decided subsequently to continue with APP and pursue highly accommodative stance of monetary policy.