Key Points

• The IMF's Director Kristalina Georgieva told: "We haven't yet seen any significant decline in the number of loans."
• The world economy is operating in an "exceptionally uncertain" environment, Georgieva stated: "Pay attention to trends and be flexible, adjusting in the event that trends shift."
• The majority of global central banks, which includes those of the U.S. Federal Reserve, have tightened their monetary policies vigorously in order to curb the soaring rate of inflation.

The International Monetary Fund has yet to observe enough banks withdrawing from lending to trigger for the U.S. Federal Reserve to shift its rates-hiking cycle.

"We haven't noticed a substantial drop in lending. There are some, but not enough, according to IMF Managing Director Kristalina Georgieva, who spoke to CNBC's Karen Tso on Saturday in Dubrovnik, Croatia.

The Federal Reserve in a May bank report advised that lending institutions are concerned about the future as problems in the middle-sized financial institutions in the U.S. caused banks to tighten their lending requirements for businesses and individuals.

The Loan officers at the Fed said that they expect the issue to persist for the rest of the year because of lower growth forecasts and worries about deposits flowing out and a lower tolerance to risk.

Georgieva explained, "I cannot stress enough that we live in a very uncertain world. So pay attention to the trends and be flexible in adapting to the changing trends in the event that trend change."

The International Monetary Fund (IMF) made its statement on the speed of the worldwide loan slowdown after its Chief Economist, Pierre-Olivier Gourinchas, told next month that banks are situated in a "more risky circumstance" that could jeopardize the IMF's forecast of 2.8% global GDP for the upcoming year.

The majority of the major central banks around the world, including those of the U.S. Federal Reserve, have tightened their monetary policies vigorously to curb the soaring rate of inflation.

In the meantime, the global debt of the world has reached a record level that is $305 trillion in the estimation of the Institute of International Finance. The IIF reported in its report of May that the rising levels of debt as well as high interest rates have triggered more concerns over leverage in the global financial system.

"Slightly More"

In the meantime, the IMF is still waiting to observe a substantial slowdown in lending, which could prompt the Fed to revert its course, Georgieva said that combined with a robust U.S. jobs report on Friday, it may hike even more.

She "We think they might need to act a bit more, but the pressures from rising wages combined with unemployment continuing at a deficient level suggest the Fed must stay at the current pace," the author continued.

She forecasted that the U.S. unemployment rate to exceed 4.5%, and possibly 4.5 percent, resulting from further rate hikes from the Fed after the rate climbed to 3.7 percentage in May, which was the highest rate since October 2022.

In the wake of the U.S. government passing the resolution to increase the ceiling on debt which was signed by the president, Joe Biden at the weekend, she stated: "What has been agreed within the context of how it was negotiated in general terms, is an excellent result."

"Our experience has shown that raising the debt ceiling frequently isn't particularly helpful, so that's where the problem resides. There is still time to reevaluate what we can do to address this, she added.

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