Central banks should continue hikes until inflation cools: IMF chief

By Ovunc Kutlu

ANKARA (AA) – Central banks around the world should continue raising interest rates until record-high inflation cools down, the head of the International Monetary Fund (IMF) said on Friday.

“Central banks are stepping up to control inflation, it’s a priority,” Kristalina Georgieva told American news channel CNBC at a meeting of G20 finance leaders in Indonesia.

“They have to keep going until it’s clear that inflation expectations remain firmly anchored. At the moment we still see inflation going up; we have to throw some cold water on it,” she added.

Among major economies, the US Federal Reserve has raised interest rates by a total of 150 basis points since March, while the Bank of England has bumped rates five times in a row.

The European Central Bank, on the other hand, has not yet made a change in interest rates, but it is expected to make a rate hike of 25 basis points on July 21.

US Treasury Secretary Janet Yellen also said Thursday that the country’s inflation is “unacceptably high,” adding that the Biden administration’s top economic priority is to bring it down.