IMF warns of “catastrophic” economic consequences of conflict in Ukraine

The International Monetary Fund (IMF) warned on Saturday against the “disastrous” economic consequences of the continuing conflict in Ukraine. “While the situation remains very fluid and the outlook is subject to extraordinary uncertainty, the economic consequences are already very dire,” the IMF said in a statement, noting that energy and commodity prices, including wheat and other cereals, rose. Is. to inflationary pressures stemming from supply chain disruptions and the rebound from the Covid-19 pandemic.”

In addition to unprecedented sanctions against Russia, the escalation of the conflict has also led to a wave of more than a million refugees from neighboring countries, the international financial institution said. In its statement, the IMF said it plans to submit Ukraine’s $1.4 billion emergency financing request to its board early next week and is negotiating financing options with officials in neighboring Moldova.

“Monetary authorities will need to carefully monitor the impact of rising international prices on domestic inflation to calibrate appropriate responses,” recommends the same source.

Referring to Russia’s position, the IMF stressed that sanctions announced by Western countries against the Russian Central Bank would “severely restrict its currency and access to international reserves to support its financial system”. “International sanctions against the Russian banking system and the exclusion of many banks from SWIFT have significantly impeded Russia’s ability to receive payments for exports, pay for imports, and conduct cross-border financial transactions”, we added.

And the IMF has warned that “countries that maintain very close economic ties with Ukraine and Russia are particularly exposed to the risk of supply shortages and disruptions and are most affected by the increasing influx of refugees”.

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