IMF's Georgieva says more than central bankers need to fight inflation

The International Monetary Fund's managing director Kristalina Georgieva said today it is not just central bankers who need to fight inflation.

She also said that other policymakers have a key role to play, including through boosting vaccinations to end the Covid-19 pandemic.

Ms Georgieva told a World Economic Forum virtual panel that the US Federal Reserve, which has signaled that it plans to begin raising interest rates, "is acting responsibly because inflation in the United States is turning into an economic and social concern."

Georgieva said it was important for central bankers to be data-driven in responding to inflation and communicate clearly any tightening of monetary policy.

She said it was also critical for other policymakers to respond, especially by increasing efforts to boost vaccination rates around the world.

"First and foremost, we need to recognise the importance to fight the pandemic," she said, noting that 86 countries around the world had not reached a target of vaccinating at least 40% of their population by the end of 2021.

She also said that inflation was a country-specific phenomenon that was making policy responses more complicated in 2022 than during 2020, the pandemic's first year.

"So we cannot anymore have the same policy everywhere. It has to be country specific. And that makes our job so much more complicated," she said.

She said that she believed the Fed was mindful of the "delicate balancing act between fighting inflation but protecting the recovery" and said US monetary policy tightening could cause problems for countries with high levels of dollar-denominated debt and "throw cold water" on weaker recoveries for some countries.

Meanwhile, Australia Prime Minister Scott Morrison said the new AUKUS defence alliance with Britain and the US will contribute to peace, stability and security in the Indo-Pacific region.

In a speech to the World Economic Forum, Morrison said Australia wanted to maintain an "open rules based international system that allows nations to flourish free from coercion."