Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, stated that not only central banks must fight inflation, but that other policy makers have a key role to play, among other things, by promoting vaccination to end the COVID-19 pandemic.
As reported by the Reuters agency, Georgieva said in a virtual IMF panel in Davos 2022 that the United States Federal Reserve, which advanced an increase in interest rates, “is acting responsibly because inflation in the United States is becoming an economic and social concern.
Georgieva said it’s important for central banks to be data-driven in responding to inflation and clearly communicate any monetary policy tightening, but it’s also critical for other monetary authorities to respond, especially by increasing efforts to boost rates. vaccination around the world.
“The first and foremost thing is to recognize the importance of fighting the pandemic,” he said, noting that 86 countries around the world had not reached the goal of vaccinating at least 40% of their population by the end of 2021.
He also said that inflation was a country-specific phenomenon that was making monetary policy responses more complicated in 2022 than during 2020, the first year of the pandemic. “So we can no longer have the same policy everywhere. It has to be specific to each country. And that makes our job that much more complicated,” he said.
He added that he believed the Fed was aware of the “delicate balance between fighting inflation and protecting the recovery” and stated that the tightening of US monetary policy could cause problems for countries with high levels of dollar debt and ” pour a bucket of cold water” on the weak recoveries of some countries.
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