'War challenge before central banks; rates will remain high'

High interest rates to affect investments, central banks look for soft landing: World Bank chief

- Rhik Kundu

$150 bn Planned lending capacity over the next decade

-$50 bn Planned share of donor contribution to lending capacity

Interest rates will stay higher for a longer period, likely complicating investments across the world, World Bank president Ajay Banga said on Wednesday.

Addressing a press conference at the bank's annual general meeting in Marrakesh, Banga said that ongoing wars are proving to be "extremely challenging" for central banks, apart from impacting trade flow and investments.

"I do think that interest rates will stay higher for longer, that can be complicated both for investment, as well as for people, who over the years, had got used to low interest rate environments," Banga said.

"I believe that wars are extremely challenging for central banks who are trying to find their way out of a very difficult situation to a relatively soft landing," he added.

Elevated inflation has led many central banks to keep monetary policy rates higher. This stretches the capacity of borrowers to repay debt and make higher investments.