IMF asks central banks to deal with inflation

The agency asked banking institutions to work on a solution for the inflationary issue resulting from the situation between Ukraine and Russia

The managing director of the International Monetary Fund (IMF) asked the central banks to adopt “decisive actions” for the benefit of the economies of their countries in the current inflationary context, aggravated by the war situation in Ukraine and Russia.

“Decisive action is needed from central banks: they must keep a pulse on the economy and adjust their policy if necessary”, Kristalina Georgieva said in her opening speech at the IMF and World Bank Spring Meetings.

In this sense, the highest representative of the IMF pointed out that the main central banks must clearly communicate the possible risks arising for emerging and developing countries as they tighten their monetary policy.

For the IMF, the current cycle of interest rate hikes must continue. However, the agency warned that in those countries where the adverse effects of the war are greater and inflation continues to rise, the pace of monetary tightening must be “carefully calibrated.”

On the other hand, the Fund called for international action to prevent a food crisis from occurring in poor countries as a result of rising prices.

Georgieva considers that the world is facing a crisis, which is happening on top of another. “It’s like being hit by another storm before we’ve recovered from the last one.”

K. Tovar

Source: Eleconomista

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