IMF says global financial instability increasing

WASHINGTON (Reuters) - The International Monetary Fund's steering committee said on Saturday that global financial instability has increased since last fall and monetary policy should aim for medium-term price stability.

"In the advanced economies, monetary policy should continue to aim at medium term price stability, while responding flexibly to signs of a more pronounced and prolonged economic downturn," the International Monetary and Financial Committee said in a communique after its spring meeting in Washington. "Fiscal policy can also play a useful countercyclical role."

(Reporting by Lesley Wroughton and David Lawder; Editing by Neil Stempleman)