BERLIN: The head of the International Monetary Fund (IMF) said during a visit to Berlin on Wednesday that diverging monetary policies posed a risk to the global economy.
"We also have risks stemming from the monetary policies that we're seeing at work, where we will probably expect a return to more traditional monetary policy by the Fed, while at the same time we have continued or renewed accommodative policies by Japan and the European Central Bank," Christine Lagarde said.
"So this will clearly involve more volatility and it will also have currency impact in that those countries or corporates that have borrowed extensively in dollar-denominated loans are going to suffer," she added.
Lagarde said the euro area economy was "turning the corner" and both the United State and Britain were seeing a rebound, but she also pointed to slower growth in China and unexpected weakness in Russia.
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