Managing Director, International Monetary Fund (IMF), Kristalina Georgieva, has warned that the moves in bond yields in the U.S. and Europe have caused markets to adjust in an orderly way to the realisation that interest rates would stay higher for longer, but a sharp further tightening of financial conditions could hit markets, banks and non banks.
She, therefore, called on regulators to safeguard financial stability and enthrone strong financial supervision.
Speaking during a press briefing last week at the 2023 Annual Meetings of the W’Bank/IMF, which ended on Sunday in Marrakech, Morocco, Georgieva said that after a period of increased public spending, the time has come to restore fiscal room so that countries can respond to future shocks, make vital investments and bring down debt.
“In most cases, this means tighter and better targeted fiscal policy. Reprioritising spending and mobilising domestic revenues, especially in emerging markets and low income countries, is now even more important.
The IMF chief further said she is hopeful that these meetings, the first time in 50 years taking place in Africa, members will agree to a third African chair at its Executive Board, from two to three, giving more voice to Africa.
Similarly, the joint ministerial committee of the Boards of Governors of the World Bank and the International Monetary Fund on the Transfer of Real Resources to Developing Countries, met on October 12, in Marrakech.
