Georgieva, during an interview with Reuters in Berlin, Germany, a day before a meeting of the European Central, during which it is expected to raise interest rates by 75 basis points, said that the positive impact of raising interest rates may take time to appear that could extend until 2024.
She explained that the positive impact of raising interest rates will come, but “this requires some patience in society.”
The European Central had stated months ago that it would raise interest rates until it reached the neutral level, a level that does not move and does not affect growth, but some policy makers are calling on the central bank to take sharper steps in raising interest rates in order to tame inflationary pressures.
Georgieva said she hopes central banks will reach neutral status, but most central banks around the world “have not yet reached that level,” as she puts it.
Eurozone inflation rose 9.9 percent in September, driven by rising food prices.
In early September, the European Central Bank raised interest rates by 75 basis points, an unprecedented move.
The European Central raised the deposit rate from zero to 0.75 percent, and raised the main interest rate on refinancing to 1.25 percent, the highest level since 2011. This is the first time that interest on deposits is positive since 2012.
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