Not only the IMF: Chinese President Xi Jinping has also launched a warning to central banks around the world in the last few hours, urging them not to raise interest rates too quickly.
Last week, the International Monetary Fund had published an article in which it warned that a sharp tightening turn in monetary policy in the United States, therefore by the Fed of Jerome Powell, or in Europe (ECB or Bank of England) could cause economic turmoil. in emerging economies.
A similar alert arrived today from the President of China Xi Jinping, on the occasion of a speech he gave on the occasion of the World Economic Forum 2022, the Davos event which again this year is held in virtual mode.
“The global industry and supply chains have been disrupted. Commodity prices continue to rise. Energy supply remains scarce. These risks combine with each other and increase uncertainty about the recovery of energy. ‘economy “, said Xi Jinping, appealing to the most important economies on the planet to urge them not to rush to raise rates too much and too quickly:
“A U-turn in their monetary policies could have serious negative consequences”, threatening in his view “financial stability and the global economy, especially affecting developing countries”.
In last week’s article, the IMF pointed out that, in the face of solid growth in advanced countries, growth in emerging markets has not been as robust. The Washington institution added that these economies also face “significantly higher public debt”.
The Chinese central bank People’s Bank of China yesterday went against the tide of other global monetary institutions, cutting the reference rates on its medium-term loans for the first time since April 2020, or in almost two years, to try to facing the economic slowdown.
The PBOC announced that it has cut its one-year medium-term lending rate (MLF) which pays 10 basis points to some banks from 2.95% to 2.85%.