International Monetary Fund (IMF) Vice-President Gita Gopinath said the European Central Bank and other major central banks should continue to raise interest rates to rein in inflation.
Speaking at the ECB’s Central Banking Forum in Sintra, Portugal, Gopinath said, “It takes a long time for inflation to return to target. This shows that central banks, including the ECB, should stick to the fight against inflation despite weakening economic growth.
Stating that structural changes in the economy in the coming period will produce more upward price pressures and may require central banks to improve their strategies, Gopinath warned that financial stresses may create tensions between price stability and financial stability targets.