WASHINGTON: The International Monetary Fund urged central banks on Wednesday to take a gradual and transparent approach to tightening monetary policy, warning that unexpected moves could shock the global economy.
The fund cautioned that investors and financial markets expect a steady approach to monetary tightening based on the belief inflation will remain relatively tame.
But the IMF pointed to some fragilities in global finance after a lengthy period of easy money policies and low interest rates, including a flood of high-risk bonds, record-high debt levels and lofty prices for risky assets.
If conditions change abruptly that could even derail the economic recovery, the fund warned.
“Financial vulnerabilities, which have accumulated during years of extremely low rates and volatility, could make the road ahead bumpy and could put growth at risk,” the IMF said in its Global Financial Stability Report, a twice-annual analysis.
Published in Dawn, April 19th, 2018
Dear visitor, the comments section is undergoing an overhaul and will return soon.