The uneven growth trends between mature and emerging market economies in recent years and the unprecedented quantitative easing and other unconventional monetary policy (UMP) measures by major central banks have reinforced the push and pull factors that stimulated higher net private capital flows to emerging markets. However, the recent announcement of a pending tapering of the quantitative easing by the U.S. Federal Reserve, the associated heightened market volatility, and weakening growth in emerging markets have begun to reverse, in part, these push and pull influences on net private capital flows to these countries. Emerging markets currencies have been depreciating in recent months, with the reversal in portfolio equity and bond flows. According to the latest estimates by the Institute of International Finance (IIF), the net private capital flows to 30 major emerging markets monitored by the IIF would ease from $1,181 billion in 2012 to $1,145 billion in 2013 and $1,112 billion in 2014. The volatility in financial markets, the prospective tapering and eventual exit from UMP, and the associated increase in interest rates—coupled with internal vulnerabilities and rigidities—have magnified the policy challenges faced by key emerging market economies. At the same time, however, net private capital outflows from emerging market economies, as a whole, are projected to rise further to about $1 trillion a year in 2013 and 2014, in addition to the continued build-up of official reserves of some $400 billion a year.