CEO of the World Bank Ajay Banga warns that a major event will take place over several months even if peace between Iran and the United States (US) is achieved, which would reopen the Strait of Hormuz.

“So we need to prepare for several months of instability in these countries,” he said, citing CNBC International on Thursday (16/04).

He also believes that it will take several months to restore conditions to what they were before the outbreak of war between Iran and the US. Therefore, he thinks people need to prepare themselves.

He also notes that inflation rates must be kept under control so that the market conditions affected by geopolitical instability can recover. Moreover, if inflation remains unstable, it could make it difficult for central banks to determine their monetary policy directions.

For your information, the Federal Reserve (The Fed) policy has been tightened by holding interest rates at 3.50%-3.75% for the past three months. This may happen due to rising inflation rates, which are worsened by the war between Iran and the US.

The Iran-US war has caused oil prices to become expensive and also increased the prices of goods. This happened because the Strait of Hormuz, a major global oil trade route, was closed by Iran following continued attacks on Tehran by US President Donald Trump.
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