WASHINGTON (Reuters) – International Monetary Fund (IMF) Managing Director Kristalina Georgieva said on Friday that it is not just central bankers who need to fight inflation, but other officials who have a key role to play, including through increased vaccinations to end the Covid-19 pandemic.
Georgieva told a virtual panel at the World Economic Forum that the United States Federal Reserve, which has signaled it plans to start raising rates, “is acting responsibly because inflation in the US is becoming an economic and social concern.”
Georgieva said it is important for central banks to be data-driven in responding to inflation and clearly communicate any tightening of monetary policy, but it is also critical that other authorities act, especially by scaling up efforts to raise vaccination rates around the world.
“First and foremost, we need to recognize the importance of fighting the pandemic,” she said, noting that 86 countries have not reached the target of vaccinating at least 40% of their population by the end of 2021.
She also added that inflation is a phenomenon specific to some countries, which is making responses more complicated in 2022 than in 2020, the first year of the pandemic.
“So we can no longer have the same (monetary) policy everywhere. It has to be country specific. And that makes our job a lot more complicated,” she said.
Georgieva said she believed the Fed was mindful of the “delicate balancing act between fighting inflation but protecting the recovery” and said tightening monetary policy in the US could cause problems for countries with high levels of dollar-denominated debt and “play a bucket of cold water” in the weak recovery of some countries.
(Reporting by David Lawder and Andrea Shalal)
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