International Monetary Fund chief Lagarde: Inevitable' Bitcoin will be regulated

Marco Green
February 12, 2018

The sharp fluctuations in world financial markets over the past few days are not worrying on the background of strong economic growth.

"There is probably quite a bit of dark activity [in cryptocurrencies]", she added at the World Government Summit in Dubai on Sunday.

"The risk of inflation would be linked to the fact that growth is being pushed, that salaries are higher because the USA economy is working well and on many cylinders at the moment", she argued. "But we can not sit back and wait for growth to continue as normal".

Almost all Arab states have posted budget deficits in the past few years, and Arab economies grew at just 1.9 per cent last year, half the global rate.

Touching on other issues, Lagarde said policy makers need to focus their energies on those who have not benefited from globalisation and those who are at the risk of losing their incomes through future automation.

Speaking at the one-day Arab Fiscal Forum in Dubai, Lagarde welcomed "promising" reforms adopted by some Arab states, but insisted much more was needed to overcome daunting economic and social problems.

Global stock markets were hit by wild fluctuations, with the USA benchmark S&P 500.SPX tumbling 5.2 percent last week, its biggest weekly percentage drop since January 2016. Concerns about new restrictions, and rumors over a potential ban in India, have fueled volatility in digital currency prices.

Talking about the growth forecast, Lagarde said the International Monetary Fund projected an increase of growth in the short term this year. She said regulators need to focus less on entities, and more on activities - who is doing what, and whether they're properly licensed and supervised. Will it be the shadow banking?

Other reports by Click Lancashire

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