The Financial Post reports in its Thursday, Oct. 27, edition that the International Monetary Fund chief Kristalina Georgieva said on Wednesday that central banks should keep raising interest rates further to fight inflation until they hit a "neutral" level, though in most cases they have not reached this point. A Reuters dispatch to the Post reports that the fund's managing director, speaking to Reuters in Berlin a day before the European Central Bank is widely expected to raise rates by 75 basis points, said it would take until 2024 for the positive effect of central banks raising rates globally to be felt. The ECB had for months said that its first step will be to raise rates to a neutral setting, where it was neither driving nor restricting growth, but some policy makers are now advocating more aggressive action, saying the ECB should go further to tame inflationary pressures. Ms. Georgieva said in an interview, "At this point we look for getting to a neutral mode, and in most places we are not quite yet there."
Central banks have to bring rates up because "when inflation runs high, that undermines growth, it hits the poorest parts of the population the hardest."
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