<p class="title">IMF chief Christine Lagarde on Thursday defended central bank rate hikes in a veiled rebuke to Donald Trump after the US president blamed "crazy" Fed policies for contributing to financial market turmoil.</p>.<p class="bodytext">Lagarde spoke as a global market sell-off rolled into Asia following Trump's comments, underscoring rising financial volatility that the IMF will address at its annual meetings with the World Bank this week in Bali.</p>.<p class="bodytext">Lagarde said central bank rate increases such as those by the policy-setting US Federal Reserve were justified by fundamentals.</p>.<p class="bodytext">"It is clearly a necessary development for those economies that are showing much improved growth, inflation that is picking up... unemployment that is extremely low," she told a press briefing in Bali.</p>.<p class="bodytext">"It's inevitable that central banks make the decisions that they make."</p>.<p class="bodytext">Following a sharp Wall Street sell-off on Wednesday, Trump said the Federal Reserve "is making a mistake."</p>.<p class="bodytext">"I think the Fed has gone crazy," he said. </p>.<p class="bodytext">Trump has repeatedly touted Wall Street record highs as proof of the success of his policies including a confrontational trade strategy, and frequently criticises the Fed for gradually raising interest rates, which could press the brakes on equity markets.</p>.<p class="bodytext">The world's financial elite are on the Indonesian holiday island for a week of discussions clouded by the economic outlook.</p>.<p class="bodytext">An IMF report released Wednesday said global growth could be at risk if emerging markets deteriorate further or trade tensions escalate.</p>.<p class="bodytext">Much of the global angst has been dominated by Trump's escalating tariff war with China and his disdain for world trading norms.</p>.<p class="bodytext">But higher US interest rates have also helped send emerging market currencies into a tailspin, as countries that borrowed heavily in dollars race to pay back debt.</p>.<p class="bodytext">Lagarde said in Bali that world leaders should fix global trading systems instead of tearing them down, in response to rising nationalist and protectionist impulses.</p>.<p class="bodytext">While defending rate hikes, Lagarde added Thursday that uncoordinated increases in advanced economies were contributing to destabilising capital outflows from emerging markets.</p>.<p class="bodytext">Combined with trade tensions, this had created "a bit of an unprecedented situation" for the world economy, she said.</p>.<p class="bodytext">"Clearly as a result of (rate hikes)... we see and we will continue to see capital flow movements," she added.</p>.<p class="bodytext">"The fact that large central banks of advanced economies are not exactly all moving at the same pace is also probably accelerating that phenomenon." </p>.<p class="bodytext">Trump has levied or threatened tariffs on goods from economies around the world, notably China, but also on traditional allies such as the European Union.</p>.<p class="bodytext">The head of the World Trade Organization warned that a "full-blown commercial war" could shrink global trade by nearly 18% and also knock worldwide GDP, hurting the United States, China, and others.</p>.<p class="bodytext">Lagarde said she would meet Pakistani officials on Thursday, with expectations that Islamabad will request a bailout over a looming balance-of-payments crisis, with Prime Minister Imran Khan saying this week his country needs $10-12 billion.</p>.<p class="bodytext">"I'm assuming that there might be a programme request on their part, but that has not been discussed and we will explore that this afternoon," she said.</p>.<p class="bodytext">The IMF on Tuesday cut its global GDP growth forecast by 0.2 percentage points to 3.7<span>% </span>for both 2018 and 2019, citing the economic uncertainties.</p>.<p class="bodytext">The meetings open in the wake of an earthquake and tsunami on September 28 on Sulawesi island that left more than 2,000 dead and possibly thousands more missing, highlighting disaster-prone Indonesia's safety hazards.</p>.<p class="bodytext">Those risks were highlighted again early Thursday, when a 6.0-magnitude quake rattled parts of the islands of Java and Bali, including meeting venues and hotels.</p>.<p class="bodytext">Three people were killed on Java when buildings collapsed.</p>.<p class="bodytext">No damage or casualties were reported on Bali, but the tremor prompted summit organisers to issue guidance to attendees on what to do if a quake strikes.</p>
<p class="title">IMF chief Christine Lagarde on Thursday defended central bank rate hikes in a veiled rebuke to Donald Trump after the US president blamed "crazy" Fed policies for contributing to financial market turmoil.</p>.<p class="bodytext">Lagarde spoke as a global market sell-off rolled into Asia following Trump's comments, underscoring rising financial volatility that the IMF will address at its annual meetings with the World Bank this week in Bali.</p>.<p class="bodytext">Lagarde said central bank rate increases such as those by the policy-setting US Federal Reserve were justified by fundamentals.</p>.<p class="bodytext">"It is clearly a necessary development for those economies that are showing much improved growth, inflation that is picking up... unemployment that is extremely low," she told a press briefing in Bali.</p>.<p class="bodytext">"It's inevitable that central banks make the decisions that they make."</p>.<p class="bodytext">Following a sharp Wall Street sell-off on Wednesday, Trump said the Federal Reserve "is making a mistake."</p>.<p class="bodytext">"I think the Fed has gone crazy," he said. </p>.<p class="bodytext">Trump has repeatedly touted Wall Street record highs as proof of the success of his policies including a confrontational trade strategy, and frequently criticises the Fed for gradually raising interest rates, which could press the brakes on equity markets.</p>.<p class="bodytext">The world's financial elite are on the Indonesian holiday island for a week of discussions clouded by the economic outlook.</p>.<p class="bodytext">An IMF report released Wednesday said global growth could be at risk if emerging markets deteriorate further or trade tensions escalate.</p>.<p class="bodytext">Much of the global angst has been dominated by Trump's escalating tariff war with China and his disdain for world trading norms.</p>.<p class="bodytext">But higher US interest rates have also helped send emerging market currencies into a tailspin, as countries that borrowed heavily in dollars race to pay back debt.</p>.<p class="bodytext">Lagarde said in Bali that world leaders should fix global trading systems instead of tearing them down, in response to rising nationalist and protectionist impulses.</p>.<p class="bodytext">While defending rate hikes, Lagarde added Thursday that uncoordinated increases in advanced economies were contributing to destabilising capital outflows from emerging markets.</p>.<p class="bodytext">Combined with trade tensions, this had created "a bit of an unprecedented situation" for the world economy, she said.</p>.<p class="bodytext">"Clearly as a result of (rate hikes)... we see and we will continue to see capital flow movements," she added.</p>.<p class="bodytext">"The fact that large central banks of advanced economies are not exactly all moving at the same pace is also probably accelerating that phenomenon." </p>.<p class="bodytext">Trump has levied or threatened tariffs on goods from economies around the world, notably China, but also on traditional allies such as the European Union.</p>.<p class="bodytext">The head of the World Trade Organization warned that a "full-blown commercial war" could shrink global trade by nearly 18% and also knock worldwide GDP, hurting the United States, China, and others.</p>.<p class="bodytext">Lagarde said she would meet Pakistani officials on Thursday, with expectations that Islamabad will request a bailout over a looming balance-of-payments crisis, with Prime Minister Imran Khan saying this week his country needs $10-12 billion.</p>.<p class="bodytext">"I'm assuming that there might be a programme request on their part, but that has not been discussed and we will explore that this afternoon," she said.</p>.<p class="bodytext">The IMF on Tuesday cut its global GDP growth forecast by 0.2 percentage points to 3.7<span>% </span>for both 2018 and 2019, citing the economic uncertainties.</p>.<p class="bodytext">The meetings open in the wake of an earthquake and tsunami on September 28 on Sulawesi island that left more than 2,000 dead and possibly thousands more missing, highlighting disaster-prone Indonesia's safety hazards.</p>.<p class="bodytext">Those risks were highlighted again early Thursday, when a 6.0-magnitude quake rattled parts of the islands of Java and Bali, including meeting venues and hotels.</p>.<p class="bodytext">Three people were killed on Java when buildings collapsed.</p>.<p class="bodytext">No damage or casualties were reported on Bali, but the tremor prompted summit organisers to issue guidance to attendees on what to do if a quake strikes.</p>