Kristalina Georgiaieva, the International Monetary Fund’s managing director, stated that Federal Reserve rate hikes could “throw water” over weakening economic recovery in certain countries.

Georgieva, speaking via videoconference at The Davos Agenda virtual event on Friday, said an increase in U.S. rates could have significant implications for countries with higher levels of dollar-denominated debt.

According to her, it is therefore crucial that the Fed clearly communicates its policies plans so as not to be surprised.

Georgieva stated that the IMF was sending a clear message to nations with large amounts of dollar-denominated credit: “Act now.” Please extend maturities if you are able. You have to correct currency mismatches now.

Georgieva, the IMF’s chief economist, said that they expect global economic recovery to continue. However, Georgieva stressed that it is “losing some momentum.”