Washington, (AFP) - The International Monetary Fund (IMF) on Tuesday urged central banks to "act decisively to return inflation to its target rate," in a report by the agency highlighting uncertain conditions in terms of financial stability.

In order to confront inflation, which is at its highest level since the early eighties of the last century, and which is feared to become "entrenched", central banks must continue to raise interest rates, according to H. in the report published on Tuesday.

On Thursday, the Director-General of the International Monetary Fund, Kristalina Georgieva, called on central banks to "more will to act now and together," noting that "there is an urgent need to achieve stability in the economy."

Inflation rates increased due to the global economy affected by the Covid-19 epidemic and supply chain disruptions, and the exacerbation of inflation due to the Russian invasion of Ukraine and its repercussions on food and energy prices.

The International Monetary Fund, which is holding its annual meetings in Washington this week in attendance for the first time since 2019, said clear negotiations on leaders' goals would be necessary "to maintain credibility and avoid unjustified market volatility."

However, the Fund acknowledged that the growing difficulties are facing both developed economies and emerging countries.

Financial markets are under pressure while investors are avoiding risk in light of economic and political uncertainty.

The tightening of monetary policies also led to a decline in the prices of financial assets, which increased negative expectations for the economy, all of which reinforces fears of a future recession.

In addition, the fund also expressed its concern about "failing in the real estate sectors in several countries, which raises concern about the extension of these difficulties to the banking and economic sectors in general."

Such is the case in China where the real estate sector is undergoing a sharp turnaround as new home sales fell during the epidemic period, causing liquidity problems for many heavily indebted developers.

Defaulting of contractors could damage the banking sector on a large scale, according to estimates by the International Monetary Fund.

Finally, the Fund highlighted the increasing difficulties faced by emerging or low-income countries with high interest rates on dollar loans, due to inflation.