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