IMF: Central banks ‘must' ease if inflation expectations drop

Olivier Blanchard, IMF

Central banks in advanced economies "must" continue easing policy to prevent a rise in real interest rates if falling oil prices cause inflation expectations to drop further, the International Monetary Fund (IMF) argues in an update of its World Economic Outlook report.

This should be done through "other means" if benchmark rates have reached the zero lower bound, adds the Fund in the report, published today.

Meanwhile, lower oil prices could alleviate inflation pressures and external vulnerabil

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