By Obinna ChimaÂ
The International Monetary Fund (IMF) has stressed theÂ importance ofÂ aÂ timelyÂ and consistent implementation of the financial sector reform agenda as soon as possible to further strengthen financial sector resilienceÂ across the world.
The Fund also said there was need toÂ continue to monitor and, if necessary, address emerging risks and vulnerabilities in the financial system.Â According to the IMF, countries should also pursue policiesÂ that wouldÂ enhance inclusion to widely share the gains from technology and economic integration and manage associated risks.
This formed part of the communiquÃ©Â at the end of the 37thMeeting of the International Monetary and Financial Committeein Washington DC.
TheÂ committee noted that global growth hadÂ further strengthened andÂ was increasingly broad-based, driven by a strong rebound in investment and trade.
It stated that risksÂ wereÂ broadly balanced in the near term, but remainedÂ skewed to the downside beyond the next several quarters.
â€œRising financial vulnerabilities, increasing trade and geopolitical tensions, and historically high global debt threaten global growth prospects. Demographic headwinds and subdued productivity growth may reduce the potential for higher and more inclusive growth going forward.
â€œThe window of opportunity remains open and should be used expeditiously to advance policies and reforms that sustain the current upswing, enhance resilience, and raise medium-term growth for the benefit of all.
â€œWe will continue to use all policy tools to achieve strong, sustainable, balanced, inclusive, and job-rich growth.
â€œIn line with central bank mandates and mindful of financial stability risks, monetary accommodation should continue where inflation remains weak and be gradually withdrawn where inflation looks set to return to central bank targets,â€ the committee said.
Furthermore, it urged policy makers in member countries to ensure that fiscal policies areÂ flexible and growth-friendlyÂ as well as toÂ rebuild buffers where needed.
The committee also advised againstÂ procyclicality,Â saying countries mustÂ create space to invest in infrastructure and workforce skills, and ensure that public debt as a share of Gross DomesticÂ Product was on a sustainable path.
â€œStructural reforms should aim to lift productivity, potential growth, and employment, while effectively assisting those bearing the cost of adjustment.Â â€œStrong fundamentals, sound policies, and a resilient international monetary system (IMS) are essential to the stability of exchange rates, contributing to strong and sustainable growth and investment.
â€œFlexible exchange rates, where feasible, can serve as a shock absorber. We recognise that excessive volatility or disorderly movements in exchange rates can have adverse implications for economic and financial stability.
â€œWe will refrain from competitive devaluations and will not target our exchange rates for competitive purposes.Â We will cooperate to tackle shared challenges.
â€œWe reaffirm the importance of implementing the conclusions of the G-20 Hamburg Summit on trade and recognise the need for further dialogue and actions.
â€œWe are working to strengthen the contribution of trade to our economies. We will continue to work for a globally fair and modern international tax system, address tax and competition challenges, including from digitalisation, as appropriate; and tackle the sources and channels of money laundering and terrorism financing, proliferation financing, corruption, and other illicit finance,â€ it added.
The committeeÂ supportedÂ efforts toward reaching the 2030 Sustainable Development Goals (SDGs), saying it wouldÂ work towardsÂ enhancing debt transparency and sustainable financing practices by both debtors and creditors and addressing debt vulnerabilities in low-income countries (LICs).
â€œWe will support countries dealing with the macroeconomic consequences of pandemics, cyber risks, climate change and natural disasters, energy scarcity, conflicts, migration, and refugee and other humanitarian crises.
â€œWe urge the IMF to work closely with members to strengthen fiscal frameworks and improve debt management capacity, and to work with debtors and creditors on promoting sustainable lending practices and tackling data gaps,â€ it added.