BERLIN, Oct 26 (Reuters) – International Monetary Fund chief Kristalina Georgieva said on Wednesday central banks should keep raising interest rates to fight inflation until they hit a low “neutral”, although in most cases they have not reached this point.

Speaking to Reuters in Berlin a day before the European Central Bank is due to hike rates by 75 basis points, the fund’s managing director said it would take until 2024 for the positive effect from central banks rising rates on a global scale are felt.

The ECB had said for months that its first step would be to raise rates to a neutral level, where it would neither stimulate nor restrain growth, but some policymakers are now advocating more aggressive action, saying the ECB should go further to control inflationary pressures.

“At this point, we’re looking to go into neutral mode, and in most places we’re not there yet,” Georgieva said in an interview.

Central banks need to raise rates because “when inflation is high it undermines growth, it hits the poorest sections of the population the hardest.”

Recent rate hikes by the ECB came amid a deteriorating economic outlook and inflation which reached 9.9% in the eurozone in September, driven by soaring food and oil prices. energy after Russia invaded Ukraine.

When asked how long she expected central banks to continue raising rates, Georgieva said the IMF predicted that “by 2024 there will be a point where central banks see the impact of their actions.

“The benefits would come but they are not instantaneous, it requires some patience in society,” she added.

Reporting by Christian Kraemer; written by Matthias Williams Editing by Tomasz Janowski

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