Questionable IMF policies
Recently, there was a meeting between IMF delegates and top officials of the government. During the meeting it was decided that bank interest rates have to be increased to dampen credit and inflation risks. It is worth mentioning here that it has not been even a year that the same IMF committee told the finance minister to lower the bank interest rates. My question is, is the IMF really giving policy advice for the benefit of the country or for their own institution's gains? Any well informed economist will agree that when a macro-economic policy is working for an economy, it should be given enough time to reap the benefits. Similarly, the policy should suit the flow of global economy.
Then how come the IMF economists tell us to follow a deflationary monetary policy (increasing interest rates) when it is clear that the global economy, particularly the US economy, is heading toward a recession. On last Friday the largest stock market index of the US, NASDAQ had a drop of 200 points or 1.9% in a single day, worst since March 2003, over dismal profit forecast by the tech giant IBM. Clearly, all the recent economic indicators of the US point to a slowing of global economy. Then why should we take the questionable advice of the IMF and jeopardise our economy for meagre assistance?
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