IMF urges vigilance on monetary policy

The IMF is urging vigilance on monetary policy globally and says the job is not yet done when it comes to keeping inflation in check despite some weakening in key economies, a spokesperson for the Fund said Thursday (February 22) in Washington, DC.

“Broadly speaking, because inflation has been coming down, but it’s not yet at target or close enough to target our line, or our view remains the same, which is the job is not yet done on monetary policy,” Julie Kozack told reporters at a news briefing.

US consumer and wholesale prices creeped higher than market expectations in the latest data released last week, prompting concern that the Federal Reserve may need to keep higher rates for longer.

“We are urging central banks to guard against a premature easing of monetary policy. And yet underlying inflation and inflation expectations are clearly and decisively moving toward, target consistent levels. Some adjustments of monetary policy, may be warranted,” said Kozack, while also noting that there is an increasing divergence between major economies with each one needing to watch its own data and circumstances.

Tunisia named a new Central Bank governor last week and has indicated that the country will be modifying its reform program designed to secure financing help from the IMF. But Ms. Kozack said the Fund has not yet received a plan from the government.

“The IMF does remain a strong partner with Tunisia and will continue to support the authorities in their reform efforts. Should the authorities express interest in a program, we stand ready to engage with them.”

A copy of the full transcript of the briefing is available at IMF.org.