IMF Chief Warns Central Banks Against 'premature' Interest Rate Cuts - Reports

At a press conference in Seoul today (15 December), Kristalina Georgieva said sometimes "countries prematurely declare victory and then inflation gets more entrenched and the fight becomes harder", according to reports by Bloomberg.

Her remarks followed signals by the Federal Reserve this week - which held rates for the third consecutive time - as the central bank officials' forecasts pointed to rate cuts worth 75 basis points next year.

IMF: Global economy has 'little margin' for monetary policy error

The European Central Bank and Bank of England followed suit yesterday (14 December) by holding rates as well, but they urged caution, reiterating rates will remain higher for longer.

Georgieva said the Fed was right to forecast a policy pivot based on US data, but added other central banks should focus on their own situations.

"Now that inflation is decreasing and decelerating but at different points in different countries, central banks have to calibrate their own actions according to domestic conditions," she added.

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