International Monetary Fund calls on banks to adopt a gradual approach to tighten monetary policy

13:41



The International Monetary Fund (IMF) on Thursday called on central banks to adopt a gradual and transparent approach to tightening monetary policy, warning that any unexpected moves could cause a global economic shake-up.

The IMF warned that investors and financial markets expect a consistent approach to tightening monetary policy based on the belief that inflation will remain relatively low.

He pointed to some of the fragile points in global finance after a long period of soft monetary policies and low interest rates, including the flow of high-risk bonds, debt levels that reached a record high, and high prices of risky assets.

In the event of any sudden change, this could hinder the economic recovery, according to the Fund warned, according to the agency "Agence France Presse."

"Financial vulnerabilities accumulated over years of low interest rates and volatility could make the way forward full of bumps and could put growth at risk," said the IMF's Global Financial Stability Report twice a year.

"For example, the sudden acceleration of inflation in the US could push the Fed to raise rates faster than expected," the report said.

"Such steps could lead to volatility in financial assets," he said, adding "global financial conditions will be severely tightened with potentially negative consequences for the global economy."

He stressed that emerging markets would be more vulnerable if that happened.

This analysis addresses the many challenges facing policymakers as the world moves towards the end of a long period of low interest rates and fiscal stimulus that has been activated after the 2008 financial crisis.

The US Federal Reserve has focused on a series of rate hikes in the past two and a half years, as the European Central Bank has indicated plans to end the stimulus program soon.

The report said that although these steps are necessary, central banks should raise interest rates in a gradual and clear manner.


https://www.alghadpress.com/news/%D8%A7%D9%87%D9%85-%D8%A7%D8%AE%D8%A8%D8%A7%D8%B1-%D8%A7%D9%84%D8%A7%D9%82%D8%AA%D8%B5%D8%A7%D8%AF-%D9%81%D9%8A-%D8%A7%D9%84%D8%B9%D8%B1%D8%A7%D9%82-%D9%88%D8%A7%D9%84%D8%B9%D8%A7%D9%84%D9%85/153939/%D8%A7%D9%84%D9%86%D9%82%D8%AF-%D8%A7%D9%84%D8%AF%D9%88%D9%84%D9%8A-%D9%8A%D8%AF%D8%B9%D9%88-%D8%A7%D9%84%D8%A8%D9%86%D9%88%D9%83-%D9%84%D8%AA%D8%A8%D9%86%D9%8A-%D9%86%D9%87%D8%AC-%D8%AA%D8%AF%D8%B1%D9%8A%D8%AC%D9%8A-%D9%84%D8%AA%D8%B4%D8%AF%D9%8A%D8%AF-%D8%A7