Many central banks are going back to the lab, reviewing their frameworks to identify innovative strategies and tools that will support the recovery from this crisis and beyond, Kristalina Georgieva, the International Monetary Fund (IMF) Managing Director, has said in her Opening Remarks during a forum on ‘New Policy Frameworks for a Lower-for-Longer World’ last week.

She explained that the abrupt collapse inactivity caused by COVID-19 brought unemployment back in focus — and added to it the risk of skill deterioration, and an increase in poverty. This, according to her, puts pressure on central banks to deliver more rate cuts and further policy accommodation. They do have a critical role to play in what I call the “long ascent” out of this crisis. The problem is that more of the same is not possible, and will not be sufficient at the moment.

Below is her full remarks:

Good afternoon, Washington; good evening, Frankfurt, and good day to everyone! It is my pleasure to welcome you to this policy dialogue focused on the consequences of ‘lower for longer’ interest rates around the world.

By now, you know this story very well: central banks have taken forceful and timely actions, providing ample liquidity and easing monetary policy. These actions have helped maintain the flow of credit and avert financial catastrophe from the COVID-19 onslaught.
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