The COVID-19 pandemic is causing an unprecedented global economic contraction, leading many central banks to reduce interest rates to historically low levels and to rely more heavily on unconventional monetary policies.
“Central banks must be innovative and bold, as they have been before in reviewing their frameworks, in updating their toolkit. This will give them vital new ammunition to fight the crisis and support the recovery, but monetary policy should not cannot do the job alone,” said Kristalina Georgieva, Managing Director, IMF in her opening remarks at the IMF Policy Dialogue: New Policy Frameworks for a “Lower-for-Longer” World event which covered a brief overview of challenges currently facing monetary policymakers.
Georgieva’s opening remarks were followed by a distinguished panel moderated by Carolyn A. Wilkins, Senior Deputy Governor, Bank of Canada; and comprised of Richard H. Clarida, Vice Chair, Board of Governors of the Federal Reserve System; Philip R. Lane, Chief Economist and Member of the Executive Board, European Central Bank; and Tobias Adrian, Financial Counsellor and Director, IMF Monetary and Capital Markets Department.
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