WASHINGTON: IMF chief Christine Lagarde said Friday that central bank stimulus is still needed for the global economy, and warned of unknown risks as it is drawn in.
"The day will come when this period of exceptionally loose monetary policy... must end," she said in a speech to a global gathering of central bankers hosted by the US Federal Reserve in Jackson Hole, Wyoming.
"We need to plan for that day, especially since we do not know exactly when it comes," said Lagarde, the managing director of the International Monetary Fund.
"Just as with entry, exit will take us into uncharted territory."
Speaking as the Fed's plans for slowing its $85 billion a month bond-buying program have roiling especially emerging economy markets, Lagarde said such "unconventional monetary policy" (UMP) approaches remained important.
"Let me say it up front: I do not suggest a rush to exit. UMP is still needed in all places it is being used, albeit longer for some than for others."
She said specifically that both Europe and Japan still have much to gain from such programs, which mostly aim to enhance growth by pressing interest rates lower.
But she said the IMF and policy makers should be thinking about the ramifications of reeling in easy-money programs.
"That includes the implications for global economic and financial stability: the whole system, not just one part of it."
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