Speaking at the ongoing China Development Forum in Beijing, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said that rising interest rates pose a risk to global financial stability.
“At a time of rising debt levels, a rapid transition from the long-term low interest rates needed to fight inflation to much higher rates inevitably creates shocks and vulnerabilities, as recent developments in the banking sector in some advanced economies have shown.” said Georgiev.
He urged financiers to be vigilant in the face of current instability. Concerning China, Georgieva noted that it will account for one-third of the world’s economic growth and that the Chinese authorities should restructure the economic balance to focus on consumption.
Formerly Bank of England raised key rate up to 4.25% per annum.
The rate is now 4.5%, the highest level since October 2008. The regulator increased the rate by 0.5 percentage points in February, the same amount in December, and 0.75 points in November.
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.