The International Monetary Fund said central banks around the world should take decisive action to prevent higher inflation from becoming entrenched and to contain expectations for future price increases. Emerging markets should continue to tighten policy to protect their credibility in dealing with inflation, the IMF said on its website on Tuesday. “In emerging markets, many central banks have already significantly tightened policy. They should continue to do so — depending on individual circumstances — to preserve their inflation-fighting credibility and anchor inflation expectations,” said Tobias Adrian, director of the IMF’s monetary and capital markets department. Investors are calling on Turkey to do more to battle inflation after prices surged by 61.1 percent annually in March, the highest rate of increase in two decades. Inflation in Turkey exceeds that of all major emerging markets and G-20 countries. The central bank cut interest rates late last year when most other banks were hiking them, and has kept them steady since. Interest rates in Turkey stand at 14 percent. “Emerging and frontier markets now face higher risks of capital outflows, with differentiation across countries between commodities importers and exporters,” Adrian said. “Amid geopolitical uncertainty, the interplay of tighter external financial conditions and the U.S. Federal Reserve normalisation (first rate increase delivered in March and unwinding of the balance sheet expected to be faster), is likely to increase the risk of capital flight.” The IMF said Europe bore a higher risk than other regions due to its geographic proximity to the war in Ukraine, reliance on Russian energy, and the non-negligible exposure of some banks and other financial institutions to Russian financial assets and markets. Ahval