IMF Managing Director Kristalina Georgieva said that central banks should keep raising interest rates until they reach “neutral level”. “At this point we look for getting to a neutral mode, and in most places we are not quite yet there,” she added.
She explained that rates has to go up since “when inflation runs high, that undermines growth, it hits the poorest parts of the population the hardest.”
Georgieva also said “the benefits (of rate hikes) would come but they are not instantaneous, this requires some patience in society.” IMF projected that tightening will continue until 2024 when central banks are “seeing the impact of their actions”.
