The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, has warned against additional monetary stimulus, saying it would pose significant risks to financial stability while speaking at an event discussing the consequences of “lower for longer” interest rates around the world.
Key Comments:
“Now many central banks are going back to the lab, reviewing their frameworks to identify innovative strategies and tools that will support recovery from this crisis and beyond. “
“While new frameworks and tools can speed recovery, additional monetary stimulus can pose significant risks to financial stability“.
“More favorable financial conditions could encourage a excessive risk taking“.
“Monetary policy makers will need to balance a short-term boost in inflation and output with an accumulation of macro-financial vulnerabilities.”
“Fiscal policy will play an important role in post-pandemic recovery. “
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