IMF report indicates growing risks to global financial stability

The risks to global financial stability have increased across the world since April this year in face of high inflation and low interest rates, the latest semiannual Global Financial Stability Report issued by the International Monetary Fund (IMF) showed on Monday.


The report analyzed how central banks cope with high inflation with corresponding policy measures, the risk of disorderly tightening of financial conditions, and the debt crisis in emerging markets and frontier markets.


The report also discussed how to close the climate financing gap in emerging and developing economies and evaluated the contribution of the open-end investment funds toward the fragility of assets.


The report suggested that central banks take decisive actions to bring inflation back to target level, pointing out that some emerging market economies dealing with a global tightening cycle should reduce risks to financial stability and maintain appropriate monetary policy transmission.


Sovereign borrowers, the report said, in developing economies and frontier markets should work harder to contain risks from high debt vulnerabilities, while policymakers should contain the further build-up of financial vulnerabilities.

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