IMF’s Gopinath: More concern over risk inflation going too low than too high due to COVID-19

The International Monetary Fund (IMF) Chief Economist Gita Gopinath said on Friday, “we have more concern over risk inflation going too low, rather than too high, due to COVID-19.”

Additional quotes

“Because there are bigger insolvency issues as covid-19 persists, govts must shift more to equity support from liquidity support.”

“There are many aspects from COVID-19 that push productivity down, by how much depends on how long pandemic will last.”

“IMF’s next world economic outlook report will assess more closely how productivity could be affected by COVID-19.”

Market reaction

The markets remain in a risk-off mood in Asia, as growing coronavirus fears and US political uncertainty weigh.

AUD/USD loses 0.33% to trade near 0.6940 while USD/JPY attacks 107.00, down 0.10% on a daily basis. The Asian stocks are flashing red while S&P 500 futures drops 0.25%