IMF Official Warns of Growing Risks and Strains in Middle East and Central Asian Banks Amid Financial Pressures.

Banks in the Middle East and Central Asia Show Minimal Exposure to Western Economic Chaos

Financial Pressures, According to IMF Director, Add to Current Stresses

According to a top IMF official, the banking institutions in the Middle East and Central Asia have little exposure despite the current banking instability in the United States and Europe. However, because of high interest rates, volatile oil prices, and years of double-digit inflation, these institutions are experiencing financial stresses.

The director of the IMF’s Middle East and Central Asia division, Jihad Azour, recently stated that the current strain in the banking industry is contributing to the already restrictive monetary policies that boosted interest rates and made borrowing more challenging.

Azour also noted the widening disparity between the suffering states and the nations with solid credit and access to markets, such as Jordan, Morocco, and those that sell oil.

Azour voiced worry about the dangers that have escalated, including high interest rates, geopolitical unrest, and increasing oil price volatility, which has led to an increase in double-digit inflation for three years running.

Azour stressed that the threat now posed by excessive debt levels and the possibility of social upheaval is bigger than financial stability. Due to the difficulties developing on the social front, they also cast doubt on the viability of sustaining strict rules.

According to Azour, countries are recommended to carry out more structural changes in order to boost their development by at least one or two percent in light of these risks.