IMF wants close coordination and contact to secure world economy

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Quarantining and social distancing are the best prescription against Coronavirus. But when coming to securing global economy, the exact opposite is needed, according to the International Monetary Fund.

The IMF said that close coordination and close contact were the best medicine to get relief from economic pain inflicted by coronavirus. The IMF pointed out that several governments have taken many steps in ensuring a stable economy. However, it called for coordinated efforts.

The Monetary Fund has come up with three areas for strengthening the global economy. Fiscal, monetary policy and regulatory response are the three action areas that would strengthen the economy, the IMF said.

With respect to fiscal action, the IMF said that fiscal stimulus would be necessary to prevent long lasting economic damage. The International Monetary Fund said that Noting that fiscal measures were deployed on a wide range of policies that prioritize health spending, the IMF said that the governments should continue the efforts to reach the affected people and businesses. This should include policies of increased paid sick leave and targeted tax relief.

On monetary policy, the International Monetary Fund said that the central banks should continue in supporting the demand. They should also boost confidence by abating financial conditions and ensuring flow of credit to real economy. In times of crisis, the IMF has called for foreign exchange interventions.

With respect to regulatory response, the IMF said that financial system supervisors should focus to maintain balance between preserving financial stability. They should also look forward for sustaining economic activity and maintaining banking system soundness.

The International Monetary Fund also said that banks should be encouraged to use flexibility in existing regulations.

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